Find out how to get the best mortgage offer through our advice and tips, solutions to help you find the best rate but also tailor-made conditions.
How to evaluate a mortgage offer
The value of a home loan offer is measured against another, this is called a comparison and already at this stage, it is important to understand that it is necessary to solicit several financial institutions to obtain two offers to compare. It is also necessary that these offers are based on a single request, this implies to go through a comparator, the only solution to get its financing tailored and especially the best conditions.
The evaluation of a home loan offer will therefore require the consideration of several points in a commercial proposal, whether from a broker, a bank or a credit institution specializing in mortgage financing. habitat. The borrower will therefore have to analyze the following: the rate, the duration, the amount, the insurance and the total cost of the credit.
Rates in 2019
The rate is the reference index in a real estate loan approach, it will determine the cost of the loan and in particular the interest that will have to be repaid and included in the monthly payments to be honored. The rate may differ slightly from the financial institutions, it can mostly be fixed or variable but in a period of low rates, it is strongly recommended to take a fixed rate.
The duration of a mortgage will affect the cost of the loan but also the monthly, that is to say, the shorter the duration, the more the credit will be interesting but high monthly payments. On the other hand, the longer the duration, the lower the monthly payment, but the higher the cost. We must therefore choose the duration that will ensure a good understanding between monthly payment and cost of the loan. The ideal is to set a monthly ceiling.
The amount of the mortgage
The amount of credit will generally cover the need for financing, it is possible for borrowers without contribution to add the amount of fees and notary (110% loan). It is also possible for a borrower to add a dedicated amount to work, avoiding the use of other credits later and especially to take advantage of the current rate.
Insurance and TAEA
A low rate of credit can hide a high rate of insurance, banks are not always best placed to offer insurance borrower and they expect to recover their margin with insurance because the borrowers do not always think to negotiate this part. For information, it is the TAEA that determines the cost of insurance, as also compare this proposal using a simulation of loan insurance.
The total cost of credit
Among all the elements of comparison, it is the total cost of credit that prevails over everything else, it is it that allows at a glance to know which credit offer is the most interesting among the proposals received. We must start with this point, then analyze each element to make a comparison to measure, and especially adapted to its needs.