Borrowing is also a matter of formalities.
To obtain your loan, you will thus constitute a file which you will present to the bank. It contains a whole series of documents and supporting documents. These relate in particular to your marital status, your income (they are used to calculate your debt capacity), but also your property purchase.
When should the file be compiled? Most of the time, you build your file after signing the preliminary contract, the compromise or the promise to sell. However, it is better to anticipate and realize it as soon as possible. You will show the banks that you are well prepared and that you are a serious interlocutor. Remember: financial institutions seek security and appreciate borrowers who pose the least risk possible.
Your credit report must be complete. The bank must be able to objectively assess the different elements of your project. If for example you use profit sharing from your business to increase your personal contribution, you must be able to prove it. Other advice: be transparent and respond well to all requests from the bank.
Anticipate requests from the bank. With a complete and well-documented file, the bank will provide you with a faster response that is better suited to your needs. Finally, don’t forget that your file will be useful to you: all the banks ask for the same documents. To the extent that you will be competing for the best conditions, you will not have to repeat these formalities or complete new ones.
Make copies of all the documents and supporting documents that make up your file. Keep them at home. Most often, banks ask to consult the original documents to ensure their authenticity. They keep the copies and return the originals to you after examination and checks. Other advice: if you borrow two, each member of the couple must provide all the documents requested.
Mortgage: personal documents
- Proof of identity: national identity card or passport.
- Evidence of your family situation: family book, marriage book, town hall certificate attesting that you are PACS if this is indeed the case.
- Proof of address: EDF receipt or telephone, water bill, certificate from the person hosting you if you are staying for free, etc. These documents must be less than three months old.
- Your last three pay slips, your last two tax notices, your last three account statements. The bank can thus ensure your good financial health. A key point: in the event of too frequent overdrafts, it will refuse your credit. These documents will also allow him to calculate the amount of your loan. It will take fixed charges from your income (car and / or consumer credit, taxes, etc.). It will then calculate the maximum amount you can spend each month on your reimbursements. If you earn $ 4,000 per month and your fixed costs amount to $ 1,000, it will be based on the remaining $ 3,000. Thus, your due date may not exceed $ 1,000 (33% debt capacity rule).
- If you are on a fixed-term contract, entrepreneur or self-employed, you must be able to show that your income is regular, generally over a period of three years before the date of signing of the promise or the sales agreement.
- The documents which justify certain parts of your personal contribution: participation in the profits of your company or profit-sharing, donation, family loans, home savings, etc.
- To reassure the bank, you can provide documents relating to your potential outstanding loans, including amortization tables showing him the monthly payments you have to pay.
- You can also communicate the documents justifying your various investments (life insurance for example). The bank will find that you are able to save. Even if these amounts do not enter your financing, the lending institution will consider you with more kindness since you will present solid guarantees.
Do not hide anything from the banker. By playing with transparency you will reinforce his confidence. Above all, you will avoid accumulating too much consumer credit with your mortgage, which can lead you to over-indebtedness.
Credit: documents related to your real estate project
- The compromise or the promise to sell, obviously signed. Of course, you have thought about including a condition precedent for obtaining credit. If your loan is refused, you will abandon your purchase and recover the amounts paid. For more information, see the condition precedent of obtaining a loan.
- The pre-contract if you buy a new home. Again, it will be accompanied by a condition precedent for obtaining credit.
- If you are building, you will provide a plan or an indication of the areas, an estimate or the construction contract to assess the cost of the project and, if applicable, the characteristics of the loan used to purchase the land. Better to attach the damage insurance certificate.
- In the former, if you need to renovate the property, you provide a plan or indication of living and ancillary areas before and after work, an estimate of the cost of the work, the construction date of the building.
- The technical diagnosis file in the old one and the energy performance certificate given by the promoter or the builder in the new one.
- In the case of a bridging loan, the bank will ask you for the title to the property you are selling to buy your new roof, one or even two appraisals and, if necessary, the loan contract attached to this accommodation with the amortization schedules.
Once your file is complete, the bank examines it and gives you its response. The deadlines depend on the nature of your project. They can be longer if, for example, you have to complete certain administrative formalities such as obtaining your building permit in the event of the construction of a single house.