Professional situation, savings and debt capacity … How to convince your banker for a loan?
In a context of interest rates still very low – 1.12% on average (excluding insurance) in November, according to the Credit Housing / CSA observatory – the real estate market is operating at full speed. But if the banks are inclined to finance the projects of the French, they do not lend wrongly and through.
The selection of candidates for property is made on a case-by-case basis, depending on multiple factors.
What is your personal situation?
When considering your loan application, a banker will start by taking an interest in your lifestyle. If the amount of your income is essential, know that your profession is just as important. An employee on a permanent contract or, better still, a civil servant, will be much more appreciated than an entrepreneur starting a business or a worker chaining precarious contracts. The first concern of lending institutions is to limit the risks of non-repayment of maturities. Therefore, they favor candidates with a good professional situation, in other words those who have both stable and regular income.
On the other hand, bankers do not like high rollers. To put the odds in your favor, you must show that you have a responsible management of your finances. This notably involves a regular savings effort, a limitation of overdrafts and little use of consumer credit. Ideally, it is also preferable to have a good contribution, corresponding to about 10% of the amount borrowed, in order to cover at least the various fees and taxes (commonly called notary fees).
How much can you afford?
The next question is whether your project is well suited to your situation. Clearly: don’t you have the madness of grandeur? To do this, the banker will first determine your debt ratio. It is a question of assessing your borrowing capacity by calculating the difference between the net income of your household and the amount of monthly payments to be reimbursed for the loan requested. If, for the time being, there is no legal ceiling, establishments generally apply a maximum debt ratio of 33%. Because the more a borrower is caught in the throat, the more there is a risk that he will not be able to discharge his debt. However, the High Council for Financial Stability (HCSF) has recently alerted the sector to the fact that, precisely, 28% of the loans currently granted do not comply with this tacit rule, which is however essential.
This ceiling is not an absolute rule, insofar as the borrowing capacity is also assessed in the light of the “remainder to live” which is, this time, framed by law. This amount corresponds to the amount necessary to meet your current expenses: accommodation, food, travel, tuition fees … On the calculation side, you must deduct from your monthly net income all your fixed charges and taxes, as well as the estimated monthly payments of the credit . The amount obtained must not be less than that of the RSA (active solidarity income), i.e. almost 560 euros for a single person. If you have dependents, the amount is increased by 50%.