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While the period is not necessarily conducive to becoming an owner (or a tenant for that matter), a question comes up very often among people who are looking to buy housing or invest in the middle of the ‘real estate. What personal contribution must be made to take out a real estate loan ?
Obviously, the situation may differ from one person to another, and that is why we will study as much as possible what amount to expect.
Personal contribution, currently essential
Before wondering what amount should be provided for a contribution, you must first know exactly what the personal contribution is, and whether it is absolutely necessary for the purchase of housing through a real estate loan.
The contribution is a sum of money that is regularly expressed as a percentage of the amount you wish to borrow. While having a contribution is not easy in this inflationary period, it is nevertheless an essential very frequently requested by banks at the moment.
While obtaining a mortgage is rather complicated at the moment, not having a deposit is immediately a problem for banks. This is an essential fact to take into account when becoming an owner, since, as we will see, the contribution requested is generally a substantial sum.
What contribution to qualify for a real estate loan ?
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The current situation in the real estate and mortgage market is particularly tense. When this is the case, banks tend to request a very substantial personal contribution in order to grant credit allowing access to the property.
You should know that contribution is not an exact science, knowing that there are many parameters to take into account. First of all, the European economic situation comes into play, with the ECB dictating key rates. Then, your financial situation will also be taken into account, even if the most important parameter is that of the bank’s criteria.
All banks have different criteria when it comes to credit approval, so some banks will not require as much personal contribution as others. In general, you still need to take into account that the banks will ask for at least 10% contribution on the total value of your credit, in order to pay the additional costs.
A simple example, if you want to borrow 200,000 euros, you will need to have at least 20,000 euros aside in order to qualify for this real estate loan so you can buy or rent one of the great properties out there as you can go online and find flats to rent canary wharf which are great for living. Some banking establishments will ask for more, depending on the parameters mentioned above.
The 10% is therefore a minimum threshold to include in your budget if you want to put all the chances on your side. You should also know that the greater your contribution, the more banks will be inclined to grant you an advantageous real estate loan. After securing a loan or mortgage, you may start searching for properties like new construction homes. Consider seeking a Snag Identification Service to inspect the property before you move in.
Is it possible to buy without a deposit  ;?
If in fact having a contribution is almost essential depending on the requests of the banks in order to take out a real estate loan, there is no obligation to have of a personal contribution. Banks have their criteria for obtaining it, and it depends greatly on your personal situation. Be aware, however, that banks that agree to grant a mortgage loan without down payment are very rare.
This is a negotiation that will probably have to be had with several banks, which, if accepted, could penalize you with regard to borrowing rates which are particularly high at the start of 2024. You will obviously need to have a solid record, with a healthy financial situation, a stable and well-paid job.
But in this case, the bank will probably ask you why you do not have a personal contribution, and you will need to find a good justification. Given that borrowing rates are expected to fall in the coming months, this may be an opportunity to take the opportunity to wait by making a personal contribution, if your situation allows it .
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