There are many tips to follow that can lower the cost of your mortgage. If some will not be adapted to your situation, others are valid for all and guarantee savings which can be considerable over the entire duration of the loan.
Here are our 10 tips to lower the cost of your loan!
1 – The transferability of the loan
If you wish to sell your property to acquire another, the transferability of the loan will allow you to keep your initial loan for the new property. Thus, you will only have to borrow the missing complement. Not all banks offer this transfer option. Yet it is a real advantage for the borrower! The transferability can allow you not to have to pay the prepayment penalties which correspond to 3% of the outstanding capital.
2 – Early repayment
Prepayment penalties come into play whether you sell your home to leave the area, whether you buy a larger or even smaller home . These penalties amount to 3% of the outstanding capital capped at 6 months interest. It is not often known but it is possible to cancel or negotiate the amount of these penalties in the event of resale of your accommodation for the acquisition of another. It will be necessary to remember to check this point in the contract before signing. On the other hand, be aware that if you renegotiate your mortgage with a competitor, the latter will charge you automatically.
3 – The change of mortgage insurance
In addition, since the implementation in July 2014 of the Hamon law on mortgage loan insurance , borrowers who have taken out mortgage loan insurance within their bank have one year to terminate it from the date of signature of the ready. The only condition to be met is to offer your bank a contract with the same guarantees as those offered by the banking contract. As a loan insurance broker, we offer you via our tool the contracts corresponding to your current guarantees. Plus, we take care of everything for you! You’ll save money without even realizing it!
4 – Reduce application fees
The amount of your application fees will depend on how easy it was for the insurer to set up your file. Indeed, if the assembly of your file required only very few appointments, you will be able very easily to negotiate your expenses of file . In the event that you go through a broker, you will have to pay him administration fees but you will not have to pay anything to your bank.
5 – Additional costs
By subscribing to your bank’s home loan, your adviser will not fail to offer you a multitude of ancillary services such as multi-risk home insurance for your new acquisition, for example. They can also offer you accounts to grow your savings. Do not hesitate to show a real interest in these proposals, however, with a commercial gesture on your mortgage.
6 – The repurchase of credit
First of all, you must first find out if this buyback will be profitable for you or not: to find out, you have to do a quick calculation to establish if the buyback of credit saves you more than the costs generated by this one.
In addition, your loan must be in its first third because at the beginning, we mainly repay interest and at the end almost only capital. After this deadline, the redemption mechanism will not be advantageous.
7 – Seduce the banker
To be certain of obtaining your mortgage in the best conditions, you have to know how to sell yourself as much as possible. This requires a perfect file, always bearing in mind that the banker does not like to take risks. He will necessarily favor a candidate for the loan who has real professional stability. Don’t panic, if you are not on a permanent contract, the procedures may just take longer.
8 – Prefer the bond to the mortgage
There are several forms of real estate loan surety : the mutual surety company, the “civil servant mutual” surety and the joint and several surety of an individual. Mutual guarantee companies ensure the repayment of the loan. These establishments operate on a loan guarantee mode which is based on the pooling of risks. They cover the purchase of housing, land or the carrying out of works.
9 – Notary fees
It is quite possible to negotiate notary fees in several ways. Indeed, it will be possible for you for example for a property that you buy furnished, to remove the furniture from the price, up to 5% of the price of the property. In the case where you acquire a new property, you can point out that the costs generally amount to 2% of the purchase price in the new while in the old, they are 7%.
Finally, you can negotiate on the costs of the compromise of sale or the promise of sale. In the case where it is the notary who is at the origin of the promise of sale or the compromise and that it has not been carried out by the real estate agency or the seller, no additional cost can be demanded. If ever he applies one, you will be able to negotiate or cancel it.
10 – The fixed rate loan
A real estate project will commit you for a long time. This is why to deal with the unexpected, the fixed rate mortgage is to be preferred because it will allow you to adapt to your changing circumstances.
Thanks to the fixed rate loan, you opt for free financing throughout the duration of your loan in order to control the cost. In addition, repayments are facilitated because you have the possibility to increase, decrease or even postpone your repayments in parallel with the evolution of your income. You can also choose to adjust your monthly payments with levels that are based on your personal situation.