To begin my real estate project effectively without wasting time, I must first make an initial assessment of my debt capacity.

I perform a quick market study

  • I inquire about real estate prices in French cities where I wish to look for real estate;
  • I compare my expectations with my possibilities.

I establish my personal investment profile

I list my savings, family loans, monetary donations, and company benefits or profit-sharing agreements. Doing this is very helpful for loan negotiations with banks; it is advantageous for me even if my assets represent only 20% of the price of my real estate project.

I estimate my debt capacity

At this stage of my real estate project, any calculations and assessments are for informational purposes only; they are not definitive. A definitive study will be carried out later with my councilor when all required information is available.

My income

Note: I only take into account guaranteed income.

  • My wages: This includes my average annual wage.
  • My bonuses (thirteenth month, holiday or transportation allowances);
  • My fringe benefits: only if they are recurrent and not reimbursements for actual expenses. For example, mileage allowances must not be included.
  • My property income: my net income is what remains after deducting my expenses and taxes;
  • My income from financial products (life insurance, grant or equity savings plan);
  • Any personal allowances (e.g. alimony, childcare, etc., even though banks may not take these into account);
  • My family allowances.

Profit sharing and shareholding premiums are not considered by loan agencies.

GOOD TO KNOW:
We only talk about net incomes. I have to do their sum, and then divide the result by twelve to know the monthly net income I have.

My current expenses

I only count recurrent expenses at the conclusion of my real estate transaction.

  • Current loans, especially consumer loans which will not be settled: I count possible savings as permanent credit;
  • Insurance (automobile or retirement insurance policies);
  • Taxes (income taxes, license fee and residence taxes): residence taxes may change in the event of a move. Otherwise, I ask for the land tax amount for each property;
  • Utilities (electricity, heating, etc.);
  • Telephone, internet, TV, etc. This kind of monthly expense is easier to calculate.

I keep in mind...

Fees related to my loan Expenses related to my new accommodation
  • My loan repayment;
  • Banking fees for opening and handling files; Potential agency fees;
  • Potential broker fees in a physical agency (approximately 1 % of the total financing);
  • Guarantees (mortgage, etc.);
  • Insurance fees (life insurance, unemployment insurance, etc.);
  • Notary fees;
  • Interim interest (accommodation soon to be finalized).
  • Moving (truck rental, hardware, etc.);
  • Potential joint ownership charges;
  • If I become a property owner, I must also take into account land taxes.

For more information > "Optimize my profile".

When negotiating my loan, I highlight my application's selling points:

  • My total income: Most importantly, loan expenses must represent less than 33% of my income. The bank then looks closely at my disposable income, which is the amount left over after I have paid my loan commitment.
  • My down payment: The larger my down payment, the lower the cost and the shorter the duration of my loan. Likewise, my chances for obtaining the loan are better when my down payment is high.

 

You are committed to reimburse your mortgage Loan. Verify your ability to reimburse before committing.