There is an increasing number of households wishing to purchase a property. As a general rule, many turn to real estate loans to finance this type of project. However, succeeding in obtaining this type of credit is not an easy task for a large part of the population. It is therefore important to understand what could be the causes of the refusal of a real estate loan in order to put the chances on one's side to obtain this loan.
Reasons for refusing a mortgage
You are planning to buy a property. You have already started by making a real estate loan simulation online. In addition, you are already starting to prepare your application. However, you are wondering if there might be any obstacles to the approval of your loan. In reality, you have good reason to ask yourself such a question since 1/3 of these credits are refused by the banks.
One of the most important reasons for this refusal is the professional precariousness. If you are currently in a fixed-term contract, or if you are a temporary worker, or if you are an intermittent worker in the entertainment industry, or even if you are a self-employed person, it will not be easy to obtain validation of your credit. This is not the case if you have a permanent contract.
In addition, the bank may refuse your loan if it considers that your income is not sufficient to pay your credit. It should be known that your monthly payments must not exceed 30 % of your income. Nevertheless, if the bank considers that if your income deducted from this monthly payment does not allow you to live adequately there will be strong chances that your loan application will be disapproved. For information, these financial organizations generally grant their credit if the salary is at least 2000 euros.
In addition, the management of your account is also an important criterion that banks take into account. They study your bank statements to find any irregularities. Generally, they take into account your last three statements, but sometimes they even look at your last ten statements. Even so, you should take into account that more than 20 % of loans are refused because of bank overdrafts.
Solutions to obtain a real estate loan from the bank
If you want your real estate purchase project to be realized thanks to your credit, you must put all the chances on your side to obtain the desired loan from the bank. This means that you must have an impeccable file. Remember that the banks first study the risk they might take in granting you this loan. Also, keep in mind that these financial organizations will determine the interest rate to be applied to your credit according to the level of risk they take.
In order for your loan application to be validated, you must have a regular income and a low debt ratio. Your financial situation must also be balanced. This means that you must avoid overdrafts for at least the last three months before you apply for a mortgage.
Moreover, your personal contribution is also a criterion not to be taken lightly. This contribution will mainly allow you to finance your notary fees as well as the establishment of your guarantee. Plan a contribution of at least 10 % of the desired capital, but it should be known that the more your personal contribution is important, the more the interest rate which will be applied to your credit will be advantageous to you.