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Home loan: are couples favored?

When applying for real estate financing, the bank will ensure that the borrower has all the resources necessary for the proper repayment of the credit. These resources are generally more important for a couple of borrowers and can facilitate obtaining a loan, especially if they have a permanent contract. So, do you have to be a couple to obtain a mortgage?

Basically, mortgage loans are one of the cheapest forms of loan procurement, since their security is guaranteed by pledging a corresponding property. With a mortgage lending value of up to 60 percent, you usually get a very low interest rate, since with higher mortgages the risk for the lender increases, an interest surcharge is charged for mortgages over 60 percent. 
It should also be noted that a mortgage loan is usually a long-term contract and that termination can usually only be carried out at very high costs. It is therefore advisable to take out prepayment protection, which enables, for example, a free change of debtor, a pledge or the transfer of the mortgage loan.

Mortgage loan: more collateral for two

Mortgage loan: more collateral for two

According to a recent study, 68% of borrowers with a mortgage are in a relationship.

This figure shows that on average two borrowers out of three take out a mortgage with the help of their spouse and can be explained by the fact that a co-borrower providing additional guarantees improves the chances of obtaining financing.

However, a contract of employment in CDI is generally necessary for the couple in order to bring enough guarantees for the home loan.

Mortgage: older couples

The study also shows that if we focus on the oldest households (over 60), the proportion of couples is even higher and reaches 73%.

This figure is the same as for middle-aged households (30 to 39 years) and also reaches 73% but gradually decreases between these two brackets.

Conversely, this study shows that only 57% of borrowers under the age of 30 are in a relationship. This figure can be explained by the fact that the young age of the borrowers does not necessarily allow them to have found a co-borrower but also by the fact that at the start of their career it can be difficult to obtain a mortgage.

Real estate purchase: favored couples

With the results of this study, it is possible to demonstrate that a couple household will find it easier to obtain a mortgage than a single borrower who must bear all the risks.

A couple’s household will be able to spread the risk and better prevent them from the fact that their overall income will generally be higher. Also, the contribution of the loan can be more important which can allow to negotiate its credit in good conditions.

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The production of mortgage loan redemption decreases

The term mortgage loan generally includes all those loans that are secured under land register law. In banking, a loan can be secured by real estate using a mortgage, which is one of the mortgages. However, not only is the land lien commonly referred to as a loan, but also the mortgage associated with it. Accordingly, a mortgage primarily serves as a means of securing a loan or a loan and is usually justified by ownership of a property, a property or the ground lease. It should be noted that the lender has the right to request payment of a contractually stipulated amount of money from the property, even if this results in the foreclosure of the property.

The Good Lenders Bank has once again published data relating to housing loans in France. The share of home loan repurchases in new financing continued to fall in April.

The share of home loan repayments fell in April

Since January 2017, banks and real estate experts have noticed a slowdown in renegotiations of home loans and consolidation of mortgage loans in France. In January, loan repurchases represented 61.58% of new loans taken out on French territory. In April, this figure declined and reached 49.6%, which means that the share of mortgage loans took over compared to renegotiations . This situation had not happened for at least 6 months.

The market for home loan consolidation seems to be slowing down, but it is still advantageous to benefit from the operation because of the low rates . A borrower who has taken out various loans to finance projects can quite opt for this operation in order to lower the amount of his monthly payments. The repurchase of credit allows the household to reduce its debt ratio and reduce the monthly burden of its financing, while having the possibility of allocating an additional amount to finance a trip, a property or a car for example.

Real estate credit remains as dynamic as ever

The bank scales allocated to housing loans increased in April, the rate being on average at 1.57% against 1.50% in January. However, this increase is very slight and does not alarm households who want to become owners or who want to buy property a second time.

Despite this slight increase, the terms for granting mortgage loans are very attractive and borrowers do not hesitate to make an appointment at several banks to compare offers . It is in particular for the current advantageous conditions that the loans granted are accelerating in France.

Note that France is one of the European countries which currently benefit from such attractive terms, especially regarding mortgage. The rates are fixed in most cases and allow many households to access property at a lower cost.