1. Show that you can manage your budget properly.
The first step before you can GET A MORTGAGE is to meet up with your bank manager. He will then go through your last three bank statements. No need to tell you that it is a lot better if you haven’t been overdraft. You aim is to SHOW YOUR BANK MANAGER THAT YOU ARE ABLE TO MANAGE YOUR BUDGET. It is also preferable no to have multiple personal loans, as little as they may be, as they can be seen as negative.
Prior to your research, PAY OFF YOUR CREDITS AS MUCH AS YOU CAN and try to get some SAINGS on a property savings account for example.
2. Make sure you have a good deposit.
The minimum required is to cover the NOTARY FEES that are usually 7 to 8% for the purchase of an old property and 2 to 3% for new builds. However, it is better if you can have A DEPOSIT of 20 to 30 % in order to show your bank manager that you have a strong project.
3. Be realistic with the amount you are looking to borrow.
The lender has the responsibility to VERIFY you DEPT CAPACITY, in other words, to check that your revenues will allow you to reimburse your mortgage. Most of the time, the amount of the monthly payment can’t be higher than 30% of your RESSOURCES. It is also common to do a calculation of the “left to live”. Which consists in estimating the sum left to the household after the mortgage repayment, to cover the day to day expenses (food, energy bills, health expenses, etc…).
You can use ONLINE SIMULATERS in order to check the FEASIBILITY OF YOUR PROJECT. Don’t forget that CHANGING THE DURATION OF THE MORTGAGE can allow you to reduce the monthly repayments. It is possible to repay mortgages over a 25 sometimes even 30-year period.
4. Chose the best time.
People on a permanent contract and self-employed people with a profitable business are more interesting profiles than people on short term contracts. This is why, if you can, you need to pick the most appropriate time to present your project and apply for a mortgage. For example, the end of the financial year to show a good FINANCIAL REPORT, the end of a trial period for a permanent position or after a pay rise.
Likewise, it is best not to wait to retire. Don’t forget that after the age of 50 the cost of the insurance can double, and sometimes even be higher that the interest rate of the mortgage and that medical exams can be requested!
The documents that you should get ready before your visit to the bank:
- Last three pay slips
- Tax declarations
- Registration documents and financial reports for self-employed people
- Tenancy agreement for tenants
- Proof of ownerships for property owners
Go to your appointment with the above documents to avoid wasting time.
5. Our advice
Go to different banks to make sure you get the best deal.
Better: use a REAL ESTATE BROKER, at ALPESVENTE, we can help you with this step and put you in touch with different BROKERS. You will SAVE TIME and MONEY!