We are seeing a growing 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, successfully obtaining this type of credit is not easy 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 your side to obtain this loan.
The reasons for refusing a real estate loan
You are planning to purchase real estate. You have already started by making a real estate loan simulation online. In addition, you are already starting to prepare your file. However, you are wondering if there could be any obstacles to getting your loan approved. In reality, you have good reasons 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 professional insecurity. To this end, you must understand that if the position you currently hold is on a fixed-term contract or if you are temporary or if you are intermittent in the entertainment industry or even if you are a self-employed person, obtaining validation of your credit will not be easy. Which 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 repay your credit. You should know that your monthly payments should not exceed 30% of your income. However, if the bank considers that if your income deducted from this monthly payment does not allow you to live adequately, there will be a good chance that your loan application will be disapproved. For information, these financial organizations generally grant credit if the salary is at least 2000 euros.
Furthermore, the management of your account is also an important criterion that banks take into account. They study your bank statements to detect any irregularities. Generally, they take into account your last three account statements, but sometimes they go so far as to look at your last ten statements. However, it must be taken into account that more than 20% of loans are refused because of bank overdrafts.
Solutions for obtaining a real estate loan from the bank
If you therefore want your real estate purchase project to be carried out thanks to your credit, you must put all the chances on your side to obtain the desired loan from the bank. This means you must have an impeccable record. Remember that banks first study the risk they could take in granting you this loan. Additionally, take into account that these financial organizations will define the interest rate to apply to your credit according to the level of risks they take.
For your loan application to be validated, you must have 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 preceding your mortgage application.
Furthermore, 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 for a contribution of at least 10% of the desired capital, but you should know that the greater your personal contribution, the more advantageous the interest rate that will be applied to your credit will be.