Mortgage credit: What should we expect at the start of the school year?

A favorable period for real estate projects, however, the yield may be difficult for some borrowers due to the rate of erosion, which will not be raised before the beginning of October. In the meantime, borrowing remains interesting to customers who can afford it.

If the people of July have already found their way to work, then the Ottites will soon follow. And in a few days, the children will be back on the school bench. These prospects do not cheer you up? Let’s look for the positive: the beginning of the school year is often synonymous with new things, for example real estate projects. Real estate Rebooting September 15thDamian Bakewell, founder of Prelys Courtage, emphasizes that once the kids are back in school. Then the activity continues until the end of November.

For mortgage applicants, the summer months have often been fraught with peril, in part because of the wear rate, and the maximum rate (including, in addition to the nominal rate, various management fees and borrower insurance) at which banks are allowed to lend money. It is updated every three months. The problem is that in times of high mortgage rates, the latter is difficult to adjust. On July 1, the erosion rate for loans of 20 years or more was raised by 0.17 points, to 2.57%, compared to 2.40% between April and the end of June. At the same time, the increase in average rates over 20 years was 0.44 points. What block many files.

A few weeks ago, since last April, we’ve had a 40% drop in mortgage production, said Bruno Rollo, president of the Professional Association of Credit Brokers. according to France 2, Citing a study for the French Association of Bancassurance Brokers (Afib), the picture is even bleaker: since January 1, 2022, 45% of loans have been rejected due to the rate of erosion.

The situation is ridiculous..these French are deprived of mortgages because of the wear rate

The burden of insurance on the borrower, especially for clients over the age of 45, as well as High Council for Financial Stability (HCSF) standards that mandate a maximum debt ratio of 35%, are all prohibitive factors.

fixed rates?

What can we expect now for the start of the school year? First good news for borrowers, 10 years OAT – The French government borrowing rate indicator, which serves as a benchmark for changes in the credit market in France – stabilized in recent weeks. After reaching 2.35% in mid-June, it is now fluctuating between 1.40% and 1.54% in recent days.

After several months of steady rise, mortgage rates could also stabilize at the start of the school year. Hoping to drop? Chances are few, according to Cecil Rockellor, spokesperson for broker Empruntis: I think it would be very optimistic to hope for that. Banks have not been able to pass rate increases in recent months, so some may be tempted to leave their rates high enough Keep margins low they have today.

We’ll see the banks’ strategy, softened by Damien Bakewell. Since OAT is no longer going up or down, our banking partners have already told us that they won’t necessarily raise their rates in September. Some institutions will Repositioned to attract more customers, when other banks seize the opportunity to rebuild their margins. One thing is for sure, while many blocked customers are currently being asked to wait, rates shouldn’t go up, even by 0.10% or 0.20%, as that would deter more borrowers.

It’s always time to borrow

On the other hand, for those who can, the period remains favorable for borrowing. With an average rate of 1.79% over a 20-year period in August, borrowers looking to get real estate are still taking out loans at rates well below inflation (measured at 6.1% over one year in July according to INSEE). If you have a real estate project, start today and if it’s already blocked, try again on October 1 once the wear rate increases, assures Ccile Roquelaure.

Save up to 70% On your borrower’s insurance

However, there is still tension currently in the real estate sector, suspended over whether or not to grant real estate loans. According to figures from the Banque de France, the production of new loans will reach 21.6 billion euros in July, compared to 22.7 billion euros in June and 26.8 billion euros in May 2022. The Minister for Environmental Transformation, for his part, indicates that, with regard to sales of new homes, 13.5% of Reservations ended with cancellation by buyers.

Deliberate mass to cut prices?

In the old segment, sales also decreased slightly, Even if the market remains healthy for the time being. However, it should not go so far as to block out either. When there is slack in the real estate market, it can take several months to recover again.

For her part, Cecile Roquelure wants to be confident of the situation over the next few months: there are banks returning from the holiday and Mortgage credit gates reopen. The summer institutions have passed, and they are now in the final period of loan production for 2022. Because if historically banks tend to accept fewer files in the summer, the period during which they work with reduced employees, mortgages remain a very attractive product for them.

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So banking institutions can shed some weight. hard to believe, Change in erosion rate calculation, which would give a real breath of fresh air to banks and borrowers alike. As for the Banque de France, it is estimated that housing loan production is gradually returning to normal but remains above the monthly averages of recent years. For an expert in the sector, this desire not to touch the wear rate is explained by the fact that the government wants to control the production of real estate credit in order to influence the price of real estate. The usury rate is a godsend for the government. A risky bet, as the equation of higher prices = falling prices is far from certain.

Percy, however, confirms reverberation Monitor with the greatest vigil the development of rates and conditions for obtaining mortgage credit, jointly with the Banque de France and all the players involved. If interest rates are proven to impede access to credit, the Minister can, on the recommendation of the Governor of the Bank of France, make adjustments.

Mortgage Loan: Find the Best Rate

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