Solutions to get the best mortgage loans
To bend the banks, which lend more and more with difficulty and at high rates, the best is to go through a broker.
Gone are the days of easy credit! Showered by the subprime crisis, banks are indeed increasingly reluctant to lend to property buyers. None of them will admit it, but the instruction is now very strict: do not take risks. Suddenly, the rate of rejection of files increased from 3 to 8% between June 2007 and June 2008. In the firing line: buyers without personal contribution, of course, but also those whose monthly payments represent more than 33% of income, or who cannot report at least one year of professional seniority.
The average term of the loans fell to 19.5 years
Are you in any of these cases? Do not rejoice too quickly. Because, not content to exclude risk borrowers, banks also lend less time. From 20 years at the end of 2007, the average duration of the loans granted increased this summer to 19.5 years, according to a study by Astro Credit. Rather boring for property candidates. For two years, it was indeed thanks to the extension of loans that many of them managed to complete their financing. The continuing rise in interest rates is not going to help their business. After climbing 1.3 points between January 2006 and August 2007, they have rounded up by 0.65 points over the past year. Result, your banker will offer you an average fixed rate of 5.20% excluding insurance over 20 years, against 4.7% in August 2007.
Want to try lowering the rating?
Do not expect to do it alone. “Even with a concrete file, it has become almost impossible,” warns Arianno Critton, boss of AB Courtage. In particular with banks which no longer make this market a priority, such as Agree Bank, Best Bank or FBC. Certainly, others continue to play the game of competition, such as Cream Bank, Penlite Bank or certain Savings Banks. Still need to know.
To avoid missing a chance, the best solution is to go through a broker. There are around ten of them with sufficient size to deal effectively with banks. If all goes well, they will get a discount of around 0.3 points from the establishment best placed. The broker will also negotiate the exemption from application fees (from 500 to 1,000 dollars) and, if you are under 40, low cost death insurance (0.20% against 0.35% on average). Put together, these gains end up becoming appreciable: 12,700 dollars for 200,000 dollars borrowed over 20 years. Largely enough to compensate for fees, between 0.5 and 1% of the amount borrowed, often capped at 1,000 dollars.