Posted on Apr 4, 2022, 6:45 AMUpdated on Apr 4, 2022, 6:14 PM
Banks are accustomed to displaying their credit tables which they update regularly – every two weeks or a month – with a link to the development of the 10-year OAT for which they are reference. And now, it’s a waltz for the labels. Over the past few months, there has been a significant increase in prices due to the rapid rise in long-term silver prices in the markets (the side effect of the war in Ukraine).
However, these official rates are not the ones that are often practiced.
To gain a new customer, banks are often willing to offer rates much cheaper than those offered in the window. But not everyone is in the same boat. To seduce the bank, it will be necessary to create a profile by presenting himself in his best form. Here are 7 points to take care of as they look carefully before giving their answer.
1. Wait for the CDI
He does not like to take risks, the bank especially appreciates CDI holders and gives them a certain seniority in their work. This gives him a clear view of income stability with the client being able to repay the loan without worry.
Income level is also an important factor. “At equivalent income levels, young people will always get a better rate from the bank than older applicants. Knowing that from 100,000 euros per year in Ile-de-France and 80,000 euros in the provinces, the candidate will get the best rates on the network”, says Pierre Chabon. , co-founder of Britto Corporation.
2. Reduce your debt ratio
It is best to avoid filing with a very high maximum debt ratio, close to the 35% cap (borrower’s insurance included). For a bank, a customer with little debt will have the ability to save more likely to invest in its financial services and products.
3. Amplify personal contribution
The personal contribution currently required by banks is 10% minimum. It allows you to pay the so-called notary fees and financial security (deposit, mortgage) in cash. However, the more money one has to inject into the process, the more the lender will appreciate it. “Once the contribution reaches or exceeds 20%, the proposed interest rate drops,” says Alban Lacondemene, president and founder of Emprunt Direct. If, in addition to the personal contribution, the loan candidate pledges to transfer all or part of his savings to his future bank, this is still a good point for his file.
4. Provide impeccable accounts
To prove he’s more ants than a cicada, the loan candidate will have an interest in presenting unrepairable bank accounts, at least for the past three months preceding the real estate transaction. Account balances should always be credit, without any incidents of paying at the counter, rejecting checks or repeating overdrafts. To reduce recurring charges, it is a good idea to settle the initial “small” credits (revolving, depreciation, staffing, etc.) and cancel subscriptions and other redundant expenses.
5. Observe the “load jump”
For first-time buyers, the “fee deduction” – in other words the difference between the rent amount and future monthly payment – will be monitored by the bank so that a change of status does not occur, from tenant to landlord greatly upsetting their finances. It is better if the “load jump” is limited or even non-existent.
6. Play on insurance
Banks exercise low margins on mortgages, and will make every effort at the time of the loan to “sell” the “home” insurance (borrower’s insurance, multi-risk home, car, etc.).
These elements are part of the negotiation game with the banker. If the future borrower accepts all or part of these trade offers, it can score points in his favour. There will always be time next year to bring out those same covers elsewhere.
7. Play the competition
Surprisingly, it is never (or almost) its own bank that will immediately offer the lowest rate. It’s best to get around the competition to get more aggressive offers from other institutions so that you agree to match. And if not, then it will be necessary to change the bank. Approaching and negotiating different networks is possible but time-consuming.
An alternative solution is to use the services of a broker. Familiar with the secrets of this complex financing, this “professional” will tour the market and negotiate on your behalf. If the transaction is done through him, he will pay the application fee (1% of the loan amount) paid by the borrower.