Borrower's Insurance, Variable Rate, Staggering: What if my mortgage is locked by the attrition rate?

Borrower’s Insurance, Variable Rate, Staggering: What if my mortgage is locked by the attrition rate?

The churn rate, the maximum rate at which you can borrow, was raised on October 1. Sometimes it is difficult to borrow the necessary amount for your real estate projects. What to do if the attrition rate blocks your loan?

The wear rate is the maximum rate at which you can borrow. Its purpose is to avoid the indebtedness of abusive rate. On time inflation, this protection unfortunately restricts some borrowers. This rate rise is one of the consequences of the new measures adopted by the European Central Bank (ECB), the latter tighten its monetary policy to combat inflation.

How do I check my wear rate?

It’s in the loan offer. APR (annual effective annual interest rate) that the amount that must not be exceeded will be entered. The APR includes the interest rate, cost of insurance as well as the application fee. East APR must be less than the attrition rate currently established in 3.05% for credits on 20 years. If you exceed it, your banker will not be able to legally conclude this loan with you.

How can I reduce my attrition rate?

If your APR is too high, there are several solutions available to you: affect borrower Insurance, since adjustable rates or the division of the borrowed sum into several small loans.

Borrower insurance: between €8,000 and €15,000 in savings

The first option to implement is negotiate by borrowing borrower insurance. The bank usually offers one, up to 30% to 40% of the loanbut it is possible to change this insurance or try to negotiate it.

Included in the calculation of the APR, playing with the insurance could allow you reduce this rate. It is also possible borrower insurance change. The interest will then do play competition between the percentage set by your bank and the one you can get from another insurer.

Also read:
Real estate credit: loans that are difficult to obtain after 45 years of age, five strategies to overcome the rate of attrition

In an article, TF1 explains that “the French realize on average between 8,000 and 15,000 euros of savingsresorting to other insurances different from those offered automatically by their bankers “for an average mortgage amount that at the moment is close to 200,000 euros”.

Borrowers in a couple can also reduce your insurance fee. Specifically, if it is lowered to 75% and one of the two borrowers dies before the full repayment of the credit, the other must continue to pay the remaining 25%. This allows the weight of the debtor’s insurance to be mechanically reduced. It is also possible to use a forecast be 100% covered.

The variable rate loan: beware of the ceiling

It is also possible to borrow at a variable rate. However, it is important to ensure that a the ceiling is anticipated and remains reasonable. “They allow you to get credit rate initially more interesting than with a traditional loan”, explained Pierre Chapon, co-founder of the Pretto a Midi Libre broker in September. He explains that with a “rate limit 1 the risk is limited, since the the credit rate can change by 1% up and down. On the other hand, if a adjustable rate limit 2 it can help an experienced investor, I don’t recommend it to unsophisticated borrowers”

The multi-line loan: to stagger loans

Two last potential solutions are proposed by Cécile Roquelaure, director of studies for the Empruntis corridor, interviewed by Midi Libre last month. “The multi-line loan It allows, for example, to borrow part of the sum for 10 years and the other part for 20 years to reduce the annual effective annual rate below the attrition rate.

The loan in the form of family SCI

Finally, as a last resort, “It is also sometimes possible to borrow in the form of family SCI. For the latter, the treatment is a bit different from conventional borrowers. Some brokers offer this option to pass difficult cases.”

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