To access the property, it is necessary to constitute a loan file. One of the elements requested in this file is the amount of your personal contribution. The larger this amount, the more banks will be reassured to lend you money. So how do you convince banks to agree to lend you money without contribution? Which establishments offer loans without contribution? Our answers!
What is the personal contribution in a mortgage?
The personal contribution is a sum of money that the borrower holds. It can come from an inheritance, savings or even a gift . This sum, already held by the borrower, becomes a contribution when he undertakes that it participates in the financing of his real estate project.
No law requires a minimum down payment before borrowing to buy a home. If each bank is free to set its own conditions in this area, it is common for financial institutions to require a minimum rate of 10% of personal contribution in order to allow its client to take out a mortgage.
This amount is generally calculated as a percentage: its calculation will be based on the amount of the coveted property. If the property he covets is estimated at €200,000, which the borrower can provide €20,000 personally, then this contribution will be quantified as corresponding to 10%. The bank will therefore be asked to provide the remaining €180,000. Of course, the greater the personal contribution, the easier the conclusion of the loan will be.
Home loan without contribution: our 6 tips
If you find yourself unable to bring this amount and blocked in the face of this condition, know that certain solutions exist. Loans taken out without personal contribution are called 100% or 110% loans (covering in this case additional costs such as administrative fees or notary fees). To subscribe to this type of loan, you will nevertheless need a serious file.
You should know that if a loan without personal contribution offers the advantage of being open to all without a minimum personal budget, the repayment rate will generally be higher than a conventional loan. Don’t hesitate to compare bank mortgage offers and their conditions, and to compete before signing any form of loan. Some organizations offer home loans without contribution!
Gain the trust of the creditor. The first thing to do to obtain the trust of mortgage credit organizations is to provide them with a complete file (pay slips, account statements, tax notices, etc.). It is also important to offer them a viable real estate project, with the documents provided by the promoter or the seller.
Compare banks! Before embarking on a loan without contribution, it is important to discover the bank which offers the best loan by playing the competition. Depending on your profile and your type of loan, you can see for yourself the rates of mortgages in real time and at a glance.
Take advantage of complementary loans. It is advisable to find out about possible aid among the additional real estate loans (PTZ+, approved loan, PAS, 1% housing loan, etc.) likely to constitute a semblance of personal contribution.
Reassure with a surety . In the event of a home loan without contribution, you are considered a risk profile for the financial institution. In this specific case, it is possible to reassure them by offering a third party, such as a close relative, to stand surety for your mortgage . This solution can promote access to demand.
Take out the best borrower insurance . The lending bank, as with any mortgage, will ask you to take out borrower insurance to avoid any risk of non-repayment of your mortgage. Thanks to the Lagarde Law, which in 2010 put an end to the banks’ monopoly on mortgage insurance offers, customers can turn to other establishments independent of banks to insure their loan. You can carry out (free of charge) a mortgage insurance simulation online to receive the quote that best suits you.
Be flexible. It is classic that your bank is not happy that you take out your borrower insurance with a competitor. Despite the fact that this is illegal, she could make you understand that in this case, she is not offering you the best interest rate. Note that you can change borrower insurance free of charge at any time and without proof, throughout the duration of your loan.
Real estate loan without contribution, what are the assets to highlight?
When applying for a home loan without contribution, the lenders, namely the banks, focus on the profile of the loan applicant to be sure of being repaid on time . A borrower must, all the more without contribution, prove to his mortgage lender that he is able to repay his debts conveniently: thus, the file to be provided to apply for the mortgage must present the assets of the borrower.
The profile of the future borrower
For the allocation of a mortgage without contribution, banks target young investors and first-time buyers who do not exceed 40 years. The age of the borrower, as well as the marital status, will be elements taken into account. As for the documents justifying the status of worker, the banks particularly consider young workers who are under permanent contracts: in the loan application file, this will prove the professional and therefore financial stability of the mortgage applicant without contribution.
