According to a recent report by the Observatoire des Crédits aux Ménages (OCM), around 30% of French people use credit to finance their real estate purchase. It is therefore a solution towards which a large part of the population is turning. If you are also considering it as a means of financing, you are certainly interested in ways to reduce the cost of your credit.
Negotiation plays an important role in a mortgage
It is always possible to lower the cost of your credit through trading. It should be noted that the cost we are discussing here relates to the APR (Total Annual Effective Rate), which represents the actual price of your loan. It includes interest, insurance, guarantees, fees, and ancillary costs. You should therefore be particularly interested in this information when you compare the different offers you can make a mortgage .
As previously stated, the application fee is included in the APR. Know that they are negotiable. Moreover, most of the time, banks offer these fees to their new clients. So do not hesitate to ask for their reduction from your bank . You will have a good chance of halving them and perhaps even reducing them to 0 euros in some cases. This deduction can be easily obtained, in particular, by accepting the subscription to another insurance offered by your banker.
Using your ability to save as an asset also allows you to get a discount during the negotiation phase with your bank. Indeed, the latter takes into account not only the income, but also the contribution during the study of your file. Thus, if you are able to give a contribution of 20% or more compared to the cost of your purchase transaction, you can earn a reduction of up to 0.4 points.
Consider borrower insurance delegation to achieve up to 50% savings and even more
Your bank will require you to subscribe to a borrower insurance . The latter is a cover for both the bank and you, in case of disability, disability, death or unemployment. As a result, your bank will usually offer you a “default” insurance policy for your home loan.
However, it is in your interest to compare it to other insurance offers available on the market. You have the possibility to opt for a delegation of insurance. In addition, know that according to your profile, the cost of your compulsory insurance can amount to a few tens of thousands of euros, at the end of the term of your credit. This gives cause for thought when it is estimated that it is possible to save up to 60% through the delegation of insurance borrower.
Hence the advantage of making a connection between the different solutions of mortgage insurance , to choose the one that allows you to get the best price / protection ratio. The law (Lagarde and Hamon) requires the bank to accept this transaction, provided, however, that your insurance offers an equivalence of guarantees with his “home” contract.