When buying an apartment or a house, the individual must generate a large sum of money in order to appropriate the desired property. To do this, he can himself make a contribution but in many cases he also calls upon a real estate loan from a specialized establishment. This loan will decide whether the buyer is able to afford the property he is looking for for his rental investment for example or other according to the differential or traditional calculation method.
Finding the right institution to borrow from
If you are looking for a loan for the purpose ofbuy to letBefore starting any negotiations, you must first sort through the establishments that offer real estate loans in order to find those which correspond best to the profile of the borrower and to his financial capacities. Some banks offer attractive rates but are reserved for a certain clientele that offers great guarantees, which means a clientele with greater means (this is the case of HSBC for example). Then, other banks are more oriented towards a more numerous clientele from the middle class, for which the rates are average. We find in this category all the known commercial banks like Société Générale, BNP Paribas.... Finally, some banks offer less attractive rates than the others but with different advantages as for La Poste or Crédit Foncier, which offer unlike most other banks, more favorable clauses to their customers.
Evaluate your debt ratio & manage your account well
In order to show the banker that thereal estate investment is well thought out and feasible, it is preferable to demonstrate that it is financially feasible. To know this, the lender will calculate the borrower's borrowing capacity. For that, it is necessary to have a rate of indebtedness included between 10% and 15%. This rate corresponds to the ratio between the monthly payments to be settled and the income of the investor. Even if the limit for a loan is 33%, having a low rate allows to give confidence to the bank and to be a candidate. It is also necessary that the household has about 400€ (600 for some establishments) after all its expenses, that the last 3 statements are almost perfect, that is to say not to be overdrawn, not to have inconsiderate expenses, not to have any consumer credit and to avoid any payment incident
By having a personal contribution
Of course, it is possible toinvest without a deposit, but generally it is necessary to put money aside if only to foresee the notary fees. In addition, it is possible to obtain bonuses from the borrower with a contribution ranging from 20% to 30% of the total amount committed.
A good credit, a good investment?
Every annuitant dreams of making the best possible real estate deal when investing in rental property or any other property for that matter. But it is still necessary to be able to finance it, and this is why before launching out in the real estate, it is essential to have a very good file to be presented to its bank or another establishment financing the project.