The real estate market is now favorable for the acquisition of a property. Indeed, the fall in prices that began in 2011 is still continuing in 2015. Historically low rates are all good conditions for investing in real estate.
If one can buy without contribution, it remains, nevertheless, one of the determining elements to profit from the best rates.
What is a personal contribution?
The personal contribution is the part of available money which you have and which you will use for your real estate project.
It comes from your savings (personal savings, employee savings, inheritance received, donation) but can also come from the sale of a previous property. In general, the banks request a contribution of 10% of the total amount of the project. This contribution is used to cover the various costs such as the fees of notaries, agency, guarantee, file.
It represents for banking organizations a good indicator of your ability to manage your budget and therefore to repay your mortgage.
How to build a personal contribution?
Building up regular savings makes it possible to limit any jump in charges between your current rent and the new monthly payment.
Different solutions allow you to increase your personal contribution:
- Regular personal savings on more specific passbooks or accounts. These allow, under certain conditions, to obtain a state premium and attractive rates.
- Employee savings which, by paying regular or punctual savings (profit-sharing, profit-sharing, etc.), benefit from a contribution from the company.
- A family donation
Can we borrow without contribution?
If most banks require a contribution, some banks finance the entire project and fees: this is called 110% financing.
Some banks may consider complementary loans, the employer’s 1% as a contribution. Without intake does not mean disadvantageous conditions either.
In fact, depending on your resources, you can benefit from a loan at an attractive rate, giving you the possibility of benefiting.
Other banks, if you are considered to be a first-time buyer, offer you first-time buyer benefits: reduction in application fees, part of financing at a preferential rate, etc.
With or without contribution, it’s time to build your heritage in good conditions.