5 tips to make a credit with confidence
You have a project and, to achieve it, you need to make a loan? To do this without stress, here are some tips.
Prepare your file beforehand
Although banks are generally not very cautious with regard to mortgages, they still make a point of not only studying the feasibility of the project, but also the financial situation of the borrower. If you want to put all the chances on your side, you will have to make sure that your file is the best prepared.
First of all, if you have consumer loans , make sure you repay them, so that you do not exceed the borrowing capacity of 33% of your income, and submit a quality file. If you are used to bank overdrafts , learn how to better manage your budget. An overdrawn account speaks against you when it comes to managing your money. Ideally, have a stable situation and savings . This will reassure your banker and allow you to give 10% contribution: you will have a better rate.
Skip historically low rates
Rates have never been so low since the late 1940s, so this is the perfect time to invest. If you have outstanding loans, you can renegotiate them with your bank to increase your borrowing capacity . If the latter is not very open to this idea, do not hesitate to ask a competing institution to buy your loan. The opportunity for him to win a new client, and for you to make a deal.
Do not hesitate to reduce the cost of your loan insurance through the death and disability insurance. If you are in good health and you are under 40, the savings on a loan can be quite substantial.
Reduce your borrowing time
The more you reduce the duration of your loan, the less it will cost you. When you borrow for a long time, the rates tend to increase, as the bank applies additional fees to cover the risk of a possible default, which increases over time.
You can increase your monthly payments, in the light of your budget , and reduce not only the duration, but also the total cost of your loan. You can also make sure to play on the credit rate by asking for a borrowing period that is out of the ordinary, as 18 years instead of 20 for example. This will limit the cost of your mortgage.
Solicit competition
There are almost as many banks as there are rate offers or insurance conditions. In order to take advantage of this situation, you will have to play to the maximum competition. Start by consulting your own bank because it is she who knows your situation the best. Once you have taken into account the offer of your advisor, go around other banks and see what they offer.
Talk to the banker and ask him a maximum of questions about the offer he is able to make and all its terms . Always use the Total Effective Rate (TEG) when calculating, not the gross rate. It is indeed the TEG that takes into account the amount of interest rates and all ancillary costs such as insurance, fees, etc. Finally, take your time: upon receipt of the file, you have 10 days to make a decision.
Think about reducing the grade
There are different ways to reduce the final grade. If you have a fixed income and you are in good health for example, your file will be easier to assemble and you can ask to lower the fees.
Before signing your contract, also consider the prepayment penalty fees in case of resale of your property . Negotiate with your banker to reduce or even eliminate them.
Finally, during a negotiation, always pretend that you may be interested in other services offered by the bank (such as an A booklet for example), but provided you have a discount on your loan.
>> This article may also interest you : 6 tips to obtain a mortgage in Luxembourg