How to take out a mortgage in good conditions and borrow at the best rates.
Of course, it is perfectly possible to buy “cash” an apartment or a house. And some do, especially after selling another real estate. But for most real estate buyers, the use of borrowing is a compulsory crossing point. And an “advised” gateway for investors, since taking interest into account reduces the amount of taxable property income.
It is even one of the advantages of stone in relation to securities: real estate makes it possible to gradually build up a portfolio on credit. While it is impossible to borrow to invest in stock exchanges or life insurance …
The right time to buy?
Before borrowing to buy, one can ask the question of “timing”: is this the right time to invest in stone?
The answer varies depending on whether it is a principal residence or a rental unit.
When one buys for housing, it is more a question of opportunity, means or needs than of evolution of the real estate market. The search for a roof can not be summarized as a financial transaction.
The purchase of a rental unit depends more on economic conditions and price developments.
But in all cases, it is necessary to know that real estate is subjected to cycles generally long and slow. Unlike other countries, the French market does not have a “speculative bubble” and the risks are very low to undergo a sudden fall in prices, a prospect that could delay an acquisition.
Historically low rates
The main argument in favor of a property purchase is the historically low level of borrowing rates at present. In the fourth quarter of 2014, average mortgage loan rates ranged from 2.50% to 3.00%. And it is probable that a floor level has been reached.
Negotiate your loan
If rates are low, even taking into account the cost of borrower insurance, it is advisable to negotiate its mortgage well. For example, by varying the duration and amount of reimbursements, by pointing out to the banker his future client profile, etc.
Negotiating a mortgage today goes hand in hand with looking for additional loans, such as zero-rated loans or home equity loans. The amounts of these assisted loans are not very large, but can help to reduce the repayment burden.
Fixed rate or variable rate
There is also the question of whether to choose fixed-rate loans or variable-rate loans, or even loans for certain investors.
The choice is wide and competition between financial institutions is intense. The borrower is therefore relatively favored today, especially since the legal rules of mortgage are quite protective.
Our file will help you to better define your decision criteria and negotiate better to finance your purchase under optimal conditions.