A Good Finance report on credit market activity in February 2014 shows that households are borrowing more and more.
They are moving more towards housing loans than towards cash, personal and revolving loans showing a continuous decline. The Good Finance notes that mortgage rates remain stable at a relatively low level, while consumer loan rates fall slightly.
Credit market recovers
Households borrow more
Banks and credit companies made more home loans to individuals than last year. In February 2014, 3.5% more loans were taken out compared to February 2013. In January, the increase was already + 3.2%.
The monthly flow represented 11.1 billion euros in February, only for housing loans, with a change in monthly outstandings to 3,913 billion euros.
Consumer loans stabilize
Good Finance figures show that the amount of new consumer loans taken out has remained stable for 6 months. They were 3.8 billion in September 2013 and fell slightly to finally find the same amount in January and February.
Borrowing rates are attractive
Still low mortgage rates
The figures from the Good Finance are interesting to compare with the monthly study carried out by the CSA observatory/housing loan. The Good Finance specifies that the average rate of long-term, fixed-rate housing loans was 3.22% in February 2014.
For its part, the CSA / housing loan observatory notes an average monthly rate of 3.04%.
The Good Finance report also highlights the average borrowing rate, for short-term housing loans and variable-rate housing loans. The average was 2.82% in February, a slight drop from January (2.83%).
In any event, it should be remembered that the nominal rate of a home loan varies according to the borrower’s profit. But above all, the cost of a loan is symbolized by its TEG, this is what the advisers of Good Credit will explain to you.
Consumer loan rates start to fall again
The Good Finance report indicates that the average rate of consumer loans was 5.95% in February 2014. This represents a decrease of 0.7 points compared to January 2014. Note that the lowest level of the last 6 months was reached in October, with 5.80%.
Bank overdraft rates rise
It seems that the average rate of overdrafts to individuals has started to rise again. After falling to 7.96% in October, they finish at 8.32% in February. The Good Finance specifies that the average overdraft rate includes ordinary accounts receivable, but also permanent loans.
Is it time to borrow?
Yes, because the conditions are met
Mortgage loan rates are low, it is possible to borrow around 3% nominal rate.
The price per square meter decreases, without however showing dizzying falls. We are therefore in a period where prices adjust according to demand, and where some sellers are ready to grant good conditions.
Buy old renovated
All professionals agree that the best real estate deals are currently in the old with renovations. Housing in which work is necessary to make it habitable can be negotiated with a large discount. The renovation works can be supported by an eco loan at zero rates, which makes the operation even more interesting.
Please note, however, that it is important that the cost of the work, added to the purchase price of the accommodation, does not lead to a total greater than the market value of the housing.
A bank will only lend you for a purchase of old with work if your record shows that you are going to make a good deal. The advisers of Good Credit help you understand how your real estate transaction should go so that it can be financed by the banks.
How much can you borrow?
The first step in acquiring real estate is to measure your purchasing capacity. This capacity depends on your debt ratio, which must not exceed 33% of your net taxable income.
More clearly, the sum of the monthly payments of your current credits (if you have them), added to the future monthly payment of this new mortgage, should not exceed 33% of your net taxable income.
To go faster, use our borrowing capacity calculator. Then, go to one of the Good Credit agencies to have a Borrower Passport delivered to you.
The Borrower Passport to save time
Real estate sellers, whether individual or professional, do not want to waste time with insolvent buyers. Taking a security deposit when signing the promise to sell is useless because resolutive clauses allow the buyer to withdraw if he does not obtain a mortgage.
Good Credit, therefore, issues you a borrower passport, on which your borrowing capacity is registered. By presenting this passport to the real estate seller, you assure him that you have already assessed your borrowing capacity with professionals.
Is there a contribution to the mortgage?
A contribution is generally necessary to have access to the mortgage. In most of the cases, a bank or a credit company will ask a borrower to pay the purchase costs themselves. The purchase costs are the notary fees, the deposit or mortgage fees, and the administrative fees.
This is a precaution taken by the lender, who wishes to commit only to the value of the property. Count 10% of purchase costs. This means that if your borrowing capacity is $ 200,000, you can turn to real estate at $ 180,000.
However, we invite you to contact your Good Credit advisor. With it, you will be able to study precisely the price range within the reach of your budget. Then, the advisor will make you benefit from his privileged contacts with major real estate players. You will thus have a quick service: determination of your borrowing capacity, search for the desired accommodation and obtaining the mortgage.