MonthApril 2019

How to find the best loan rate?

The Annual Effective Rate (APR) is the interest rate that directly influences the total cost of credit. A percentage rigorously framed by the law which owes its qualifier “global” to cover both the basic interest rate, the operating costs of the bank and the insurance premiums associated with guarantees. That’s why it’s different for different institutions.

What is the evolution of the rate?

What is the evolution of the rate?

After reaching the record low of 1.31% in November 2016 , interest rates have been rising steadily over the last few months. According to the CSA funding observatory, the average level was 1.34% in December 2016 and 1.49% in February 2017.

In March 2017, the average rate was 1.51% : 1.36% on loans over 15 years, 1.57% over 20 years and 1.84% over 25 years. In April 2017, these rates will mark a new rise. Nevertheless, this movement remains reasonable: the current levels (beginning of April 2017) correspond to those of July 2016, a period considered “particularly favorable to the realization of real estate projects by households” , as underlined by the CSA Observatory / Housing Credit .

In the coming months, interest rates are likely to continue their recovery : professionals estimate that the average rate of 2% excluding 20-year insurance could be crossed this summer or September 2017. A trend that risks s in the fall, with banks that will certainly have achieved their commercial objectives.

How to know the rates charged by the banks?

How to know the rates charged by the banks?

As mentioned in the introduction, the APR is a “global” rate that includes three separate charges, two of which are directly fixed by the lending institution. Therefore, there are disparities between the different structures . Not to mention that some of them will favor certain audiences over others according to their commercial policy.

To know the rates charged in banks, it is therefore advisable to visit their regional sites , because not all borrowers benefit from the same rates, whether they live in Bordeaux or Lille: bank rates do not necessarily change homogeneous way.

For example, the West region and the North region posted overall lower regional scales last February, which was not the case for the Mediterranean region. However, the latter still presented some of the most competitive rates!

How can the broker advise you?

How can the broker advise you?

Given the constant and geographic fluctuation of interest rates, the assistance of a credit broker helps to optimize the chances of forming a good financing plan. Indeed, as a business provider, this professional has a rate grid , already negotiated, from its partner banks. In fact, it already has, from your first meeting, valuable information to formulate a first advantageous offer.

A high fork that he can present to you without risks and on which he will work to transform this first approach in good, even excellent, financial arrangement . For this, depending on your profile, he will immediately know which establishments are most likely to make you the best offer.

Then he will negotiate the various key points of the proposal by highlighting the strengths of your file. Because, beyond the interest rate, there are a large number of elements that directly influence the total cost of your credit, like borrower insurance.

Is it easy to change banks for loan?

Today, the combination of several factors favors banking mobility : the emergence of online banks multiplying the number of offers and a legal framework protecting the consumer / borrower. Let’s study together the case of a person wishing to change bank without mortgage loan and the case of another, with a loan already subscribed.

Case 1: The client has no real estate loan in progress

Case 1: The client has no real estate loan in progress

Should he contact his historical bank?

Do you have a current account and savings solutions in a bank and you are considering a first real estate purchase? The first step is to contact your institution, so that it makes you a proposal.

Rich with a lot of information about your profile (evolution of savings, overdrafts …) your historical bank is definitely a contact to solicit: it can more quickly issue a proposal since it already has the necessary information.

Can he / should he question other banks?

Can he / should he question other banks?

However, this does not mean that we must be satisfied … It is essential to be able to compare several proposals to be able to have arguments to negotiate. An approach that involves carefully collecting the supporting documents for distribution to the various organizations solicited.

Professional coaching is strongly advised: the know-how of a credit broker can direct you to the banks most likely to respond favorably, and his negotiating skills will make you enjoy the best possible conditions in the current context.

Case 2: The client has a mortgage and wants to change banks

 Case 2: The client has a mortgage and wants to change banks

What does the Macron law say?

You have already taken out a home loan, but you are not satisfied with your current bank. So, already, know that it is quite possible to transfer it to another agency , while remaining within the same bank.

Otherwise, be aware that the change of institutions is facilitated by the Macron law and especially by amendment 322 which provides for a “redirection service to the new account of all credit or debit transactions that would occur on the account closed to the new account ” .

How to do with a non-transferable real estate loan?

How to do with a non-transferable real estate loan?

Concretely, the French Banking Federation, in its guide on mobility, cleared the three possible options for changing banks with a mortgage being: you can keep your loan, pay it in advance, or request a credit redemption another establishment.

In the latter case, do not hesitate to be accompanied by a broker to negotiate for you the best possible conditions.

What are the obstacles to bank mobility?

What are the obstacles to bank mobility?

If the law promotes banking mobility, it can not make real estate loans transferable . In fact, to be able to change banks by having one, another organization must agree to buy it back.

Therefore, like any loan underwriting process, your personal situation is carefully examined to estimate the risks you represent. A history of forbidden banking or insufficient income can then prevent you from changing banks.

Whatever the situation in which you are, the wisest is to seek the advice of a professional and let you guide to the solution best suited to your situation.