Buying a property is a durable investment that remains one of the favourite investments of the people. They trust real estate to ensure an annuity, reduce their taxes in the case of rental housing, or have a roof over their heads that can be passed on to the future generation. Because if you think of the tax exemption of real estate, you must not forget either that the purchase of a house or a dwelling can be part of a dream or of security.
If you think of the tax exemption of real estate, you must not forget either that the purchase of a house or a dwelling can be part of a dream or of security.
In any case, it will be necessary to finance this real estate purchase. And for that, it is interesting to know what steps to follow to conclude the sale and the credit agreement.
Find out, set the budget, and do credit simulations.
Before launching on the internet or jumping into the first real estate agency, you will have to set the budget and the financing plan. How much do you have, what is the budget you want to invest, and do you have a so-called stable situation.
When should you ask your bank if it grants you a loan, before or after the search, before or after the promise to purchase?
Agricultural mortgages gives you a complete guide to become an owner:
1) The Personal Contribution
(must represent between 10% and 15% of the purchase price)
The use of financial aid or subsidised loans (they fall into the category of personal contributions). Also, keep in mind the real estate credit.
Next, you will tackle research. This can be done by scanning the classifieds, going through a real estate agent, by a private sale of real estate, and mainly by word of mouth.
It is also necessary to know for what purpose the purchase will be made:
- Is it to rent it? In this case, to whom and in which geographical area is the most profitable?
- Size of the house and geographical area: this will make it possible to negotiate prices because some goods have a value higher than market prices.
- What is the dilapidation of the accommodation: needed some work or not?
- Before making the purchase offer, you can already ask your bank for a mortgage simulation, which does not commit you to anything. It is advisable to contact several banks to compare real estate rates. The mortgage simulation can also be done online on certain sites.
2) The Purchase Offer
Once the rare pearl has been found, it is advisable to check the selling price and possibly renegotiate it within a margin of 10%, for example, depending on the work to be carried out.
Keep the following important points in mind:
- The seller is obliged to provide concise information on the condition of the property such as the presence of asbestos, the finding of risk of exposure to lead, the energy performance diagnosis, the condition of the installations, and the presence of a risk of dry rot.
- For the moment you have not requested a home loan from your bank, but know that you have a good chance of obtaining one, thanks to the simulation with the banks. A firm and unreserved purchase offer binds the person who makes it.
- This purchase offer may be limited in time at the request of the buyers so as not to be too long-term dependent on a purchase project.
3) The Compromise or Promise of a Sale
If you accept the purchase offer, you then have 30 days to find a home loan that complies with the conditions of the preliminary contract. But it is possible to extend it to 45 days, knowing that banks can take two months to respond to a credit request.
- It is strongly recommended to add a suspensive clause (future or uncertain event which suspends the birth of the contract) to the sales agreement which stipulates that the sale takes place subject to the agreement of a mortgage. It is a legal provision.
- In certain geographical areas, the municipality has an urban right of first refusal, i.e., it can become the owner of the land to be sold to carry out a project of general interest. It then has a period of two to three months to cancel the sales agreement.
- All transactions must go through a notary to secure the signing of the sales agreement. The seller and the buyer can both call on their notary at no additional cost to the buyer.
Now is the time to contact your bank and obtain a mortgage loan which will be linked to the act of selling the property. If the sale is broken, the mortgage will no longer be granted or used for other projects.
Note the following points:
- A mortgage can be refused if certain conditions are not met: a filing of an over-indebtedness file, or even a professional situation not guaranteed overtime.
- Don’t forget that you will have to regularly answer for your state of health.
- In addition, banks no longer lend without you taking out mortgage credit insurance. It can be obtained from the lending bank but can also be taken from competing institutes at a better price.
- This mortgage credit insurance provides reimbursement in the event of serious illness, disability, or dismissal (except for serious misconduct).
5) The Deed of Sale
The deed of sale is signed by the notary and it is the one who summons the parties involved in the contract.
Important points to remember:
- It takes care to check the information related to the borrower such as his debt ratio.
- Notary fees amount to a certain percentage of the sale price. These are additional costs that should not be forgotten when establishing the budget.
- After reading the contract, the real estate agent, the seller, and the buyer will sign the deed of sale. The buyer agrees to pay the full amount.
Be vigilant at all stages, especially the first. It is crucial to complete the act of purchase. The credit simulation can be done very early and it avoids painful findings such as the impossibility of financing the dreamed good. Don’t forget to compete, some banks offer more attractive interest rates than others, as does borrower insurance.