Providing a personal contribution is a sine qua non condition for accessing a mortgage. It is a guarantee on the solvency and the seriousness of the borrower who participates at the same time in the reduction of the amount to be borrowed. How can this capital be built up? Answers.
The personal contribution corresponds to the financial contribution of the borrower within the framework of his mortgage. It will be used to cover certain costs arising from the establishment of the credit, in particular the transfer duties, the emoluments of the notary, the agency fees as well as the cost of the mortgage. These charges are considered by the banks and cannot be resold, unlike real estate and land which are tangible assets available for resale. It is for this reason that the bank asks that these purchase costs be paid by the acquirer themselves.
The personal contribution will also serve as proof of the borrower's savings capacity and therefore his repayment capacity. It's hard to trust a person who never manages to put money aside, because it means that he will probably have a hard time honoring his monthly payments. Beyond that, paying a substantial personal contribution will facilitate access to the loan. The subscriber benefits from the best conditions and can negotiate with the bank to speed up the process or even request a reduction in administration fees.
The amount of the personal contribution is expressed as a percentage of the borrowed capital. As a general rule, the bank asks for a contribution of 10% of the amount requested for the loan. However, this rate can also vary depending on the profile of the borrower. A single person or a couple on a fixed-term / temporary contract should ideally provide a contribution of 30%. A couple, one of whom is on a fixed-term contract and one on a permanent contract, will offer a 20% personal contribution. For couples on permanent contracts or civil servants, a contribution of 10% will suffice.
There are several ways to build up this personal contribution. The most common way is to mobilize savings through a savings plan, life insurance or a booklet A. It is allowed for the contribution to be made up of an inheritance, a donation, the sale of a property or even a family loan. The borrower can at the same time use other devices such as subsidized loans. These include, among others, the 1% housing loan, the Paris Housing loan, the zero-rate loan, the housing savings loan or even small loans such as departmental loans, CAF loans or even civil servant loans.
For those who do not yet have the opportunity to build up an economy, as is often the case with young workers who have just found a job, it is still possible to access a mortgage without down payment. With this 100% or 110% credit, the bank agrees to bear the various administrative costs, agency fees or notary fees. However, the offer is not accessible to just anyone.
Before agreeing to finance the entire loan, the lender screens the subscriber's debt history, his professional situation and the management of bank accounts. The geographical location of the accommodation to be acquired will also be of interest to him, because the property represents an additional guarantee which protects him in the event of default in repayment. Indeed, the bank will be able to use the capital resulting from the sale to recover its money. Finally, another important point to know about the loan without contribution:it may be accompanied by a higher interest rate.
