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How to negotiate the best mortgage?

The majority of real estate investors take out a loan to finance their purchase project. To ensure the profitability of the project, they must find cheaper credit with more flexible borrowing conditions. Discover some important things to negotiate to get the best credit.

Some important points to negotiate

The credit rate

In terms of home loans, the subscriber can choose between the fixed and variable credit rate. For the fixed rate, the negotiation operation is easier, because it is enough to find several offers and to choose the best proposal. As for the variable rate, the borrower must carry out a study to verify the bank's margin in relation to the borrowed capital and the benchmark index which varies the credit rate. In general, the longer the term of the loan, the higher its rate. To be sure, you have to do credit simulations to easily compare offers.

Borrower insurance

Taking out loan insurance increases the borrower's chance of obtaining credit. It allows the lender to have the guarantee of being reimbursed in the event of default by its client. It can be taken out with an insurance company or the bank. Each year, on the anniversary date of the loan contract, there is the possibility of changing borrower insurance. If he has taken out insurance with the bank, he can renegotiate his contract or change insurance by playing the competition.

Prepayment penalties

It is quite possible to negotiate prepayment penalties provided you do so when submitting the loan application. Indeed, the bank does not have the right to refuse the choice of the borrower to settle his loans before term. However, as it is a loss of earnings, it may impose compensation or reimbursement penalties. The borrower can also be exempted from these costs if he decides to anticipate the repayment of his credits in order to take out a new loan.

Application fees

Whether the borrower uses a broker or goes directly to the bank, he can negotiate the processing fees. Comparing offers is the best way to do this. Sometimes it is more advantageous to take out a loan at a higher rate and without application fees than to sign with a bank that offers a lower credit rate with exorbitant fees. If he is not a good negotiator, he must seek the intervention of a broker who is used to negotiating with banks.

Tips for a successful negotiation

To optimize his chances of obtaining a mortgage, the borrower must opt ​​for a product adapted to his profile. A young employee planning to invest in rental property can take out a long-term loan. Banks do not easily accept seniors who ask to take out long-term credit since they are subject to several vagaries of life. The credit subscriber must also highlight his main assets, such as a lower debt ratio or his professional stability.