Access to the property is the dream of many French people. Are you planning to acquire your very first main residence yourself and are naturally thinking of taking out a mortgage to finance it? Getting a home loan as a first-time buyer is possible. The bank’s decision will, however, be based on one essential element: your file. Here’s how to complete your first real estate purchase.
What is a first-time buyer?
A first-time buyer can be:
- a person who purchases a home for the first time;
- a person who has not owned their main residence in the 2 years preceding their mortgage application.
In the latter case, the person has passed from owner to tenant of their main residence. If at the same time, she owns a second home that she rents out, she is still considered to be a first-time buyer.
First-time home loan: on what criteria are banks based?
The criteria studied by the bank in the context of a first-time home loan are the same as for a person who would not be accessing the property for the first time. To have the best chance of obtaining its agreement, your file must in particular show:
- that you are a good manager (no payment incidents or overdrafts);
- that you have a stable professional situation;
- that your debt ratio is not too high compared to your income.
Good to know: buying back credits, a solution
If you already have a mortgage or consumer loan, buying back loans is an effective way to lower your debt ratio.
The presence of savings is also a plus. Even small savings each month will show that you can manage your budget. If it is large enough, it can be used as a supplement. Because you have to know: to be reassured, many banks require that the borrower has a personal contribution equivalent to about 10% of the mortgage applied for.
For a first real estate purchase of $ 200,000, for example, you should be able to provide $ 20,000. This amount will be used to pay all the additional costs of your property purchase, such as notary fees and agency fees. A contribution also facilitates the negotiation of the mortgage rate.
If I do not have a personal contribution, will my mortgage be refused?
No, not necessarily. Some funding organizations are flexible, especially when dealing with a young first-time buyer. They understand that at the start of professional life, putting money aside is complicated, but that this situation is bound to change over time.
This does not mean, however, that your first-time home loan application will be automatically accepted. When it studies your file, the bank will be even more meticulous with regard to your situation, your income, etc.