Frais crédit immobilier

The Various Costs Associated With Mortgage – Challenges

In France, the real estate market has been doing well for years, even if it has Tilt to brake Currently. Whoever says investing in stone, most often says mortgage. In fact, the personal contribution in general is not enough to carry out such an operation. However, a home loan is a significant cost, which varies depending on the term of the loan and the applicable interest rates. especially that Rates tend to rise againEspecially because of inflation. To obtain a mortgage, it is necessary to compile a loan application file. This is where the first additional costs come in. Banks often charge a fee for what they call an application fee. If these generally do not exceed 1% of the mortgage amount, the amount can quickly reach several hundred euros, or even exceed 1,000 euros. Be aware, however, that it is possible to negotiate this application fee, or even have it cancelled.

Notary fees, an essential element

Unlike administrative fees, notary fees are absolutely inevitable in the context of real estate purchase. Also known as acquisition costs, they burden the final bill and must be taken into account by the buyer. It consists largely of taxes and levies assigned to the state and local authorities (municipalities and administrations). The rate of these taxes may vary depending on the location of the property in question and represents the majority of notary fees. The remainder consists of the notary’s remuneration, that is, the share due to him at the end of the transaction. Again, a rate is applied which is variable depending on the amount of the transaction. Thus, for all transactions over 60 thousand euros, this rate is 0.799%, compared to 3.870% for those under 6,500 euros, for example. Note that if the amount invested is more than 100,000 euros, the notary has the possibility to apply a deduction of up to 20% of his fee.

Borrower insurance and other bank charges

The costs related to the borrower’s insurance must also be considered in the context of the mortgage. However, subscribing to this insurance contract is not legally binding. However, in practice, banks will demand this guarantee. This borrower’s insurance allows the bank to cover in the event of disability, incapacity for work or death. The cost of this contract is variable, as it depends on many factors. The insured’s age, state of health, occupation, term and amount of the loan shall be taken into consideration in particular. Between the applicable interest rate and the monthly payments to be paid, this insurance can account for a quarter of the mortgage amount, or even more. So this is a point that must be taken into consideration before purchasing real estate. Be aware, however, that Borrower’s additional cost of insurance It can be reduced by bringing competition into play, especially since it is now possible to take it out with an insurance company other than the bank that gave you the credit. Speaking of the bank, also consider the bank charges related to the potential opening of an account as part of getting your mortgage.

Other potential costs in the context of a mortgage

There are also so-called warranty costs. It protects the bank in the event of non-payment of the monthly mortgage payments and generally takes the form of a mortgage or deposit. Generally calculate 1.5% of the total loan amount for the mortgage and 0.8 to 1% for the deposit. If you go through a real estate agency, you will also have to pay the agency fee once you sign the deed of sale. Finally, if you decide to use a real estate broker, they will apply brokerage fees. An approach that can nonetheless be profitable because this professional will do everything in his power to find the most interesting mortgage.

(by HREF Editorial Board)

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