For most French investors, if they want to invest in stone, they must get a mortgage. Below are the steps required to apply for a mortgage.
Signing of the sales agreement
After identifying your needs and wishes, you finally choose the accommodation that is right for you. After the landlord accepts your purchase proposal, you will sign the sale agreement. This means you agree to purchase the property by obtaining credit financing. If you do not get the loan, you can cancel this compromise by notifying the owner of the denial of the loan by registered mail. Be careful because the rules are different when buying a new apartment: new apartments are off-plan and therefore still under construction. You cannot visit it and sign a sales agreement with a developer or a new real estate agent.
Loan amount
You now want to apply for a mortgage and want to know how much to borrow. The amount of your mortgage depends on two factors: your income and your personal contributions.
Note that your debt ratio cannot exceed 33% of your income. However, if your income is good, considering the concept of « remainder to live », the bank can agree to give you a debt ratio higher than 33%: this is the living expenses after calculating the money you have left every day minus the monthly repayments. If that amount is sufficient, then the debt ratio could increase to 40% or 45%.
Different banks must be compared to determine which one offers the best rate. Therefore, it is recommended to use a credit broker such as Boursedescredits.com. It will help you find banks with higher interest rates, penalty clauses on prepayments, and good guarantees. The broker will also help you sort out your loan application and gather all the necessary supporting documents.
If your home loan is with a bank other than the one you normally use (eg because it has a better credit rate) then that bank will usually require you to open an account and transfer your income to their institution . . Note that this is not mandatory and you can choose to keep your account with your old bank without opening another account with your new bank.
credit offer contract
A formal loan contract must be provided by the lender and will detail all the details of your loan offer. Once the contract has been signed, it will be returned to the institution by registered mail to validate the agreement.
repay credit
Repayment starts one month after signing the real deed of sale. Then it will be monthly until expiry, or possibly sooner if specified in the contract.