The home loan explained. Taking out a loan to buy a new home or a plot of land for your future project is a major financial commitment that can be somewhat complex. Côté Sud explains the steps involved in this process and gives you its best advice when you are preparing to borrow for your property purchase project.
01. Establish a budget
Determining your budget is a crucial step. First, it is important to estimate the total amount of your monthly expenses. Then, using a loan simulator, work out an estimate of how much you will have to pay each month for the loan. Add this amount to your current total expenses and you get your monthly debt. If you are sure of your ability to repay, then you can go ahead. If not, you can simulate different scenarios by changing the amount of the loan or the repayment period, in order to fine-tune the financing plan. As you know, the longer the repayment period of your mortgage, the more interest you have to pay back.
02. Find the best offer
For the same property project, the banks will propose different property loan offers with several variables of criteria on the loan insurance, the monthly payment, the duration and the cost of the housing loan according to the desired monthly payment or the personal contribution committed. The comparison of the proposals obtained for a loan of an identical amount and duration is carried out on objective criteria: rate, expenses of file (paper fees), total cost of the credit (with the tariff of the insurance), the monthly payment and allowances of anticipated refunding if there is any.
03. Submit your application
Once you have found the most competitive mortgage offer, you will need to put together your application and submit it to the lending bank. Gather your identity documents, your last 3 payslips, your last bank statements, proof of address and the documents of the property you wish to buy (title deeds, plans, PIN, etc.)
04. The final step
After checking the documents, the bank will carry out an evaluation of the property and determine its real value. If the price of the property is too high or too low, your loan application will not be approved. If the price and the amount you are looking for match and your application is approved, your notary should then forward a draft of the sale agreement to your bank . The draft sale agreement is a legal document, similar to the deed of sale, and is crucial to the closing of the loan. Once this stage has been completed, it takes two to three weeks before the bank disburses the funds.
A home loan is a process that can be long and complex. It is best to hire the services of professionals who will be able to guide and accompany you during this process. Côté Sud offers you a tailor-made service and provides you with professional support during your property purchase project.