You want to realize your real estate project but think you do not have a sufficient down payment to get a loan? Is it possible to take out a personal loan as a contribution to a mortgage?
Most households who are considering buying real estate use credit. Banks often require a personal contribution of at least 10% of the purchase price. What to do to obtain a mortgage without sufficient input? Answers.
The importance of personal contribution to a real estate project
The personal contribution represents the sum that you will invest in your project with the bank. These funds can come from your savings, the resale of a home or an inheritance. By extension, they may include some loans or equity participations such as the 1% Housing Loan or the ELP.
In general, banks require that at least 10% of the operation be financed by a personal contribution. The larger the amount, the better the terms and conditions of the lender. Indeed, this contribution represents for the bank a way to evaluate the risk incurred by lending you funds. It must at least cover notary fees that increase the cost of the operation and possibly limit the amount of credit.
By making a significant contribution, the borrower proves his ability to save and therefore his ability to repay his future loan.
How to borrow without sufficient input?
You do not have sufficient savings to convince the bank to grant you a mortgage? Know that there are several solutions.
If your down payment is reduced, you can act on agency fees. By purchasing your property directly from an individual, these costs will be removed allowing you to make significant savings. This involves taking the steps of real estate research yourself.
Place money on a CEL or ELP
Many savings products can allow you to gradually build your personal contribution. The best known are the home savings account (CEL) and the home savings plan (PEL). By resorting to this solution, you will obviously not be able to borrow immediately because to constitute a personal contribution can take time, according to the sums placed each month on these supports.
To subscribe a credit
As a last resort, you can subscribe to a consumer credit. Indeed, it is quite possible to build a personal contribution through a loan. However, this solution should be avoided because it represents a real risk taking. If you are no longer able to meet your financial obligations to the bank, you will probably need to set up a credit buyback to avoid the risk of over-indebtedness.
Today, more and more banks are willing to lend without a contribution provided that the plaintiff’s file is sound. Thus, if you justify a stable job, regular income and a sufficient rest to live, you have all your chances of obtaining a real estate loan without contribution. On the other hand, it will be more difficult to negotiate your rate and get haircuts. Feel free to play the competition using an online comparator.