How do I know how much I can borrow to buy a house?

Buying a house involves going through the debt capacity stage, that is, knowing the amount a borrower can get from the banks for his real estate project. Here’s how to get a home loan.

Real estate loan to buy a house

Real estate loan to buy a house

Buying a house is an important project that requires sound preparation and the first step is simply to find out how much it is possible to borrow from banks and credit institutions. The ability to borrow is the first calculation done by a bank advisor, it simply check the current indebtedness of the borrower and make sure that adding a monthly mortgage loan is possible but also to what extent.

For this, it needs to take into account the current income of the home but also expenses, including any outstanding credits. All these elements will allow the bank advisor to define the maximum monthly payment that a borrower can repay and deduct the total amount of the mortgage. Some data may affect borrowing capacity such as borrowing at two or the rates offered at this time. A high rate will necessarily reduce the borrowing capacity of the household, so it is better to play the competition.

Know how to borrow and compare rates

Mortgage simulation is a form that allows to apply for a mortgage loan and that informs the borrower on two points, the first being to validate or the feasibility of a real estate project and the second is to compare the different rates offered on the market. It is therefore possible to calculate its debt capacity by specifying a desired amount of home purchase, this will then allow the lender to articulate an offer and if necessary, adjust the amount to allow the borrower to validate his funding.

The rates and durations vary constantly and must be taken into account in a study of the capacity of indebtedness, it is for this reason that it is strongly advised to deposit a request for mortgage loan taking care to inform information closer to reality, so that the simulation result is also consistent. Important point: the borrower insurance can play a fundamental role in the cost of a mortgage, it is also possible to compare the different offers and reduce this cost by establishing a simulation online.

The stages of validation of a borrowing capacity

The stages of validation of a borrowing capacity

To validate a house purchase project, it is possible to proceed as follows:

  • Step 1 : Submit a real estate loan simulation to verify borrowing capacity and to know the conditions of subscription.
  • Step 2 : search for real estate and formulate an offer to purchase
  • Step 3 : Examination of the financing file with the selected partner and validation of the mortgage according to the loan conditions.

The study of a complete file can be carried out under 24H following the establishments of credits, a period of retraction of 11 days must however be respected within the framework of this financing.