Real estate credit: how to negotiate well? Advice


To get the best possible mortgage for your situation, you will need to negotiate with different banks. It’s not just about negotiating the interest rate, but also loan insurance and all the associated costs.

We give you all the advice to follow to properly negotiate your mortgage.

To negotiate the conditions of your mortgage, it is better to have an impeccable file and retained by all the banks. On the one hand, it facilitates your procedures, and on the other hand it facilitates competition between financial institutions.

Sufficient personal contribution, and even above the minimum required

Don’t expect to negotiate if you don’t have personal input. Today, it is an essential condition for obtaining a mortgage. The minimum required is 10% of the total amount of the loan. But if you can put 20% or even 30%, your file will be on top of the pile.

Indeed, a significant personal contribution reassures the banks on the profile of the borrower and can significantly shorten the duration of the loan. Who says reduced duration, says reduced interest rate. To build up a personal contribution, several solutions: personal savings, family donation or loan, zero interest loan.

The debt ratio below 33%, or even below bank requirements

The debt ratio not to be exceeded in France to access real estate credit is 35% for the acquisition of a main residence and 33% for other types of projects (second home, rental investment).

It is recommended not to exceed 33% so that your file is accepted under good conditions. But if you want great terms, then a 20% or 30% debt ratio is ideal. The lower it is, the more you are in a position of strength.

For example, with 5,000 euros of income, this means that the amount of your credits does not exceed:

  • 1,650 euros for a debt ratio of 33%
  • 1,500 euros for a debt ratio of 30%
  • 1,250 euros for a debt ratio of 25%
  • 1,000 euros for a debt ratio of 20%

Who says low debt ratio, also says comfortable living …

The rest to live is sufficient, and even comfortable

The notion of remainder to live corresponds to the amount you have monthly to live once your credit maturities (real estate and consumption) have been paid. This sum must be at least 500 euros for a single person, 650 euros for a couple, 800 euros with a child, etc.

But of course, the more the rest to live is important, the more your loan file is considered. Because this left to live allows you to save, to face hard knocks, to live comfortably. Also, the higher the initial income, the more optimal the remainder to live is achieved.

Thus, in our previous example, the rest to live with income of 5,000 euros and a debt ratio of 33% is 3,350 euros (5,000 -1,650), which is well beyond the requirements for living. decently.

The management of bank accounts is impeccable

To take out a mortgage, the banks ask you at least for your last three account statements. Some establishments will go back over the last six months. We therefore advise you to keep your bank accounts impeccably before presenting your real estate project.

To do this, you will pay particular attention to the following elements: no overdraft (even authorized), no payment incidents (such as a debit rejection), no seizure on bank accounts, no intervention fees or ‘agios, no lavish spending.

By following these few rules, and by postponing your loan application for a few months if necessary, you will have every chance on your side to present sound management of your bank accounts.

Become the ideal customer

The “ideal client” is the one that the bank would like to see regularly for the management of its outstandings and the offer of investment or insurance products. In other words, a person whose income will be domiciled in the financial institution.

During the negotiation phase, do not hesitate to make an effort in front of your banker. You can offer the domiciliation of your salaries, but also the subscription of a savings contract, the transfer of your insurance (auto, home, health, provident, etc.).

Tip 2: take out borrower insurance under delegation

Mortgage loan insurance weighs much heavier than you might think in the envelope allocated to your mortgage. The bank will offer you group insurance, which is generally less attractive than private individual insurance.

By having the competition establish quotes, you could earn a few tens of euros per month, a few hundred euros per year and a few thousand euros on your entire mortgage for identical or even greater guarantees.

There is only one condition for the delegation of insurance to be accepted by the banking establishment: the guarantees must be at least equivalent to those offered by the bank.

Be aware, however, that mortgage insurance is a product appreciated by banks, because the commercial margin is attractive on this type of contract. You can therefore very well accept the insurance offered, and change it just after setting up your mortgage.

Tip 3: choose the most financially attractive loan guarantee

In addition to loan insurance, the bank will require that your bank credit be guaranteed in the event of default. This guarantee can be materialized by a surety, by a real estate security (privilege of money lender, mortgage) or by a pledge.

Do not hesitate to ask the bank for all the possible options in order to compare them with each other and go to the highest bidder. Note that in 99% of cases, it is the bond that remains the most attractive and the least expensive in the long term.

Tip 4: let the competition play!

Do you have the ideal borrower profile, or almost all banks agree to finance your real estate project? Congratulations, negotiating becomes much easier for you since you can have several loan offers.

The simplest solution, but sometimes the most expensive if your client profile is “easy”, is to use the services of a mortgage broker. The latter will find the best bank credit for you, but also the best borrower insurance.

On the contrary, if you want to negotiate your mortgage on your own, you will have to canvass the various banks yourself. To benefit from a boost, have the reflex of online simulators, whether for credit or for attached borrower insurance.

You can then select the best offers from credit institutions to make an appointment physically. Be sure of yourself, convincing, and have a well-prepared case to save your interlocutor time.

If you can negotiate the interest rates on your mortgage, also think about negotiating the application fees, the conditions of modularity of the loan and the early repayment indemnities.

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