Make a mortgage - become a homeowner

Real Estate Loan

Whether you have been looking for an apartment to buy for 6 months or you want to build , you will at one time or another ask yourself the question of financing . And the sooner the better! Rkenney Law provides an update on how to set up a mortgage, the traps to avoid, the advice to follow, the different types of mortgage.

You will necessarily have to think about:

  1. establish your budget for a real estate purchase
  2. search and find the apartment or house
  3. choose a credit institution
  4. choose between the different mortgage loan formulas :
  5. mortgage loans regulated by the state
  6. unregulated mortgage loans

Budget and real estate purchase

Before committing or simply looking for real estate, it is useful to know your debt capacity .
The amount that you can allocate each month to repay your loan must meet 2 requirements:
- this monthly payment must be acceptable to your banker (s) and it is generally lower than you thought ...
- this reimbursement must leave you enough to live on and you must plan your future "new" charges.

The banks

Sometimes they are able to actually lower their rates to keep (or acquire) you as a customer. Everything will actually depend on your profile (income, household composition, savings, mode of consumption, etc.). The best rates are offered only to the customer whom the bank thinks will be of good value to them.

Take stock of your income and expense possibilities

To get started check the following points:

  • do you have a contribution (savings, goods to resell ...)?
  • what are your fixed incomes that you can count on?
  • what are your monthly charges such as taxes, car loan, telephony, insurance
  • if you have already made home savings you can take advantage of the attached fixed rate loan
  • you may be able to borrow at zero rate , see the terms of acceptance.

Your monthly budget seen by the banks

Once this assessment has been carried out, you must make an estimate of your debt capacity as will be perceived by your banker. The total of the mortgage loans you are going to take out and your fixed charges must not exceed 33% of your total income . This is not an absolute rule. Indeed, the borrowing capacities for a household with 2 children and earning US $ 2,500 are not the same as for a single person earning US $ 4,500 per month.

33% is not the same for everyone!

Remaining to live for different types of households
per household
33% of
Remains to live
Remains to live
per person
Example 1 4 $ 2,500 $ 825 $ 1675 $ 418
Example 2 1 $ 4,500 $ 1,485 $ 3,015 $ 3,015
Example 3 3 $ 5,000 $ 1650 $ 3350 $ 1116

As indicated in the table above, it is important to check what is left to live for each person in the household after the repayment of the loans.

In example 1 (2 parents and 2 children) there is only 418 us dollars left per person for food, clothing, outings, vacations. This situation is not sustainable over time, yet with a debt of 33%.
In example 2 of the bachelor he has 3015 us dollars left for his current expenses !!! Suffice to say that he could largely have a debt of more than 40% ...
In Example 3, there is also a margin of flexibility possible. With 1116 us dollars per person the debt could be higher.

Anticipate your new charges and expenses!

If you exceed this amount, you will still find banks to lend you, but usually at a higher rate. Do not forget that by becoming an owner you will have new charges to which you were not used such as property tax , co-ownership charges , "compulsory" work (cleaning, heating to change, defective electrical system. ..). Some charges such as EDF are likely to increase significantly if, for example, you move from an apartment to a house, or from geothermal collective heating to fully electric heating.
Example of a budget for obtaining a mortgage
(you can also consult your last account statements to verify that there are no other fixed charges).

Remaining to live for different types of households
Salary 1 AT Taxes VS
Property tax D
(phone, internet)
Salary 2 B EDF F
Property tax D
Auto loan G
Other credits H
TOTAL A + B = Z C + D + E + F + G + H = X

A loan commits you and must be repaid.
Check your repayment capacity before you commit.

Copyright © 2020 All rights reserved Legal notice Sitemap

Professional funding for physiotherapists