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The Good Credit barometer on bank darlings in Q3 2015 shows that mortgage lending is becoming more “popular”. While last year at this time the CSP + was courted by the agencies, now a salary of $ 4,000 net per couple and a contribution of 10% is enough to obtain the most attractive rates.

And yet the rise in borrowing rates has indeed taken hold, with an average of 2.65% over 20 years. But as usual, certain profiles are pampered by the banks, and now it is primarily a question of households capable of saving.

The best profiles borrow less, but …

They are still suffering from rising rates

In January 2015, the banks initiated a policy of gradually lowering borrowing rates, until triggering the return of buyers to the real estate market. They are particularly keen on this because they seek to build customer loyalty over the long term. This clientele will consume savings products, insurance, use their credit card, and their children will probably open an account at the same agency.

The banks, therefore, continued this advantageous policy, until they were overwhelmed by mortgage loan requests. They then gradually began to raise their rates, intending to limit the flow but also repair their margins. But Sandrine Allonier, head of bank relations at Good Credit, tempers: “since May, credit rates have increased by 0.30 points, a return to their level in early 2015”.

So much so that even the darlings of banks are concerned today. While the 5th edition of May showed that the best borrowers had been able to obtain a rate of 1.75% in Grenoble or Lyon, now they have to “settle for” 1.95% in Bordeaux for the favorite among the favorites.

The personal contribution becomes less and less important

Already the Good Finance observatory put its finger on the flexibility of the banks when it photographed the real estate market in the 2nd quarter of 2015. It turns out that the level of personal contribution required to buy new real estate, decreases by -13.8% over 1 year, after having even dropped by -7% in 2014. A similar observation in the old where borrowers of the 2nd quarter needed to bring -12.2% less compared to their predecessors from last year.

Broker agencies affiliated with Good Credit and distributed throughout France, note that a personal contribution of 10% of the cost of the operation is now enough to charm a client advisor. What is important now is the income of prospective borrowers.

A rich couple with $ 4,000 net / month

If for average French an individual is considered wealthy as soon as he earns $ 6,500 / month, the average banker is more compromising. Sandrine Allonier concludes that “couples with incomes above $ 4,000 net per month at 2 and at least 10% contribution” is officially considered to be the darlings of banks.

This is equivalent to a declared annual income of $ 48,000 in a household. If we refer to the INSEE figures on the deciles of household disposable income, we realize that this level of resources concerns couples with 1 child, located between the 7th and 8th decile. We are tempted to deduce that almost 25% of these households are affected, but it remains to sort out on the shutter those who have a good savings capacity.

As Jérôme Robin, president and founder of Good Credit reminds us, the banks seek to “favor the best files, that is to say, those with which they can establish a real relationship in the long term: the high income that has savings prospects, but also and fortunately, first-time buyers for whom the entire banking relationship is to be built.

Where are the bank darlings located?

Those who were able to renegotiate their loan for much less

Banks love first-time homeowners. They have already repaid part of the capital borrowed, in general, they have also had time to build up savings, and if they have done all of this without ever missing a single monthly payment and without an overdraft, they are pampered. However, Sandrine Allonier recalls that the rise in borrowing rates that occurred in July brought the number of files processed from 50% to 25%.

The fact remains that this clientele is still attractive to banks, like this couple from Bordeaux who was able to renegotiate their mortgage at 1.95% over 20 years. With 4200 $ per month, they are indeed among the best profiles.

Just behind them in the ranking comes this couple from Grenoble and their child. On the other hand, they are below the canon of beauty as considered by the banks, with $ 3,900 per month of income between them 2. This did not prevent the local agency of Good Credit from renegotiating $ 192,500 from 2% property debt over 20 years.

What are the options for a loan despite a mini job? In a modest credit line, very different credit options can be derived from a 450 USD job. Which these are and why there can be problems, more on this in the article.

Credit despite mini-job – why can there be problems?

The income from a mini job is actually unsuitable for lending. The monthly wage of a maximum of 450 USD is very low. More than double would be necessary to get into the area of ​​the garnishment limits. Almost all credit providers require at least one income above the garnishment limit to make a loan possible. There is always an exception to every rule.

A mini job is a regular employment relationship. Anyone who works in Germany and is not over-indebted is almost automatically granted a small discount. For a mini job, the expected overdraft facility corresponds to an average monthly income. If the bank holding the account does not grant overdraft facility itself on request, it is advisable to change providers. For example, the Cream Bank offers a permanently free current account with an interest-free overdraft facility of 50 USD.

Not as easy as finding an overdraft despite finding a mini-job. Nevertheless, there are also options.

Installment loan despite mini-job

If a conventional installment loan, as shown by the connected credit comparison calculator, is used, then the income from the mini job is not sufficient. Credit can only be taken into account if the mini-job is only an additional source of income in addition to normal working income. This situation is more common than most people can imagine. According to the DGB (German Trade Union Confederation), about 2.7 million people go to their next job after work. The employment income from both employment relationships together can very well skip the garnishment exemption limit.

In this way, at least until October 31, 2013, a particularly favorable loan offer could even be taken advantage of. Anyone who applies for the loan amount of 3,000 USD over a term of 36 months via the Infra Bank receives a special interest. The effective fixed interest rate, which is independent of creditworthiness, is only 2.78 percent.

Without a second income, a solvent co-applicant or guarantor could provide access to the low interest rates. In this case, the guarantor assumes the liability risk for the loan despite the mini-job.

Credit opportunities despite mini-job – without guarantor

Not all lending is measured using the same requirements. Mail order and department store loans are intended to promote sales. It is often only important to be able to state a clean school and a work income. In this way, with a little luck, even zero percent financing as a loan can be possible despite a mini-job. Large electronics stores in particular have a reputation for particularly easy lending.

If there is a very small loan amount, the money should only be available immediately in cash, another credit option opens up. It is the loan from the pawnshop. Income plays no role in this lending. The pawnbroker uses only the mortgage lending value for his loan. Within the scope of this value, he pays the loan immediately in cash despite the mini-job.

When a client applies for a loan, we ask them to produce various documents so that they can process their request.

Indeed, we are required to justify the identity of the people participating in the loan, to verify their repayment capacity as well as the purpose of the loan, and finally to determine whether additional guarantees or guarantors are necessary.

 

Applicant’s ID

First, we need documents that allow us to identify the person or people who will participate in the credit transaction (holder or holders, guarantors, etc.).

In Andorra, the main piece of identity is a passport, both for individuals from Andorra and for foreigners. Foreign residents must also produce their Andorran residence and work permit, as well as the identity card or passport of their country of origin.

 

Supporting documents for the purpose of the loan

To study the financing operation, we also need documents justifying that the money will be used for a specific purpose. The aim is to ensure that the good or service to be financed corresponds to the purpose of the loan requested from the range of Cream Bank financing products.

The applicant will be invited to produce various supporting documents depending on the loan requested (promise to sell a property, binding offer, proforma invoice, preliminary contract or quote).

 

Documents required to study the repayment capacity

To find out the debt capacity of applicants, we need documents to identify and justify recurring income and costs. In this way, we can assess the repayment capacity of the loan and determine the maximum amount that can be granted to the client.

In order to prove the applicant’s income, we need the salary slip for the last three months as well as an updated CASS point statement.

If the applicant plans to receive other exceptional income, he can produce the corresponding supporting documents so that these income are taken into account in the calculation of his repayment capacity (for example, the deposit contract for the sale of a home or a rental contract) .

Regarding costs, the applicant must produce supporting documents for the accommodation (rental contract, mortgage, etc.), invoices paid by direct debit and other possible recurring costs.

If he works on his own account, he must bring additional documents concerning his economic activity and his tax declarations.

When the applicant is a new customer, that is to say that the account is opened for the loan request, he must also produce a statement of the position and movements of his account over the last three months established by the bank with which he usually deals .

Finally, we will also need a declaration of assets signed by the applicant, stating their family situation (marital status, dependent minors, etc.), income from the family unit, their assets (buildings, titles, account balances, etc.) as well as its obligations (debts held with credit institutions).

 

Supporting documents relating to guarantees and guarantors

Depending on the type of financing transaction and the repayment capacity of the loan holder (s), they may have to present additional guarantees, such as mortgage on property, pledging of securities or a guarantor. In the event of a mortgage guarantee, the deposit contract and a recent appraisal of the property must be produced. Guarantors must provide supporting documents similar to those requested from holders. Indeed, as subsidiary debtors, the guarantors should assume the debt in the event that the holders cannot honor their payment commitments.

Remember that at Cream Bank, we want to help you realize your dreams. We provide you with a wide range of loans and mortgage loans. We can finance all kinds of projects, from the acquisition of housing to the purchase of a car, through assistance in financing the university studies of your children.

As every month, the observatory formed by the surety company Crédit Logement and the CSA institute published its report on mortgage loan rates. There is an upward trend in the new, and a downward trend in the old.

The financing costs less in December 2019 compared to November 2019, and yet we borrow over longer periods. More importantly, we borrowed more in December than in November, and the banks made more mortgages.

Average mortgage rates

3.09% in December 2019

According to the CSA / Crédit Logement observatory, the average level of the mortgage loan rate in December 2019 was 3.09%. These data do not take into account credit repurchases, nor bridging loans, nor transactions including the repurchase of credit is a new mortgage. In November 2019, the average rates were 3.08%, so we are facing a slight increase, however without significant consequence.

More than three-quarters of mortgage loans below 3.5%

78.6% of the home loans granted in December 2019 were granted at a nominal rate below 3.5%. Next comes the tranche of nominal rates between 3.5% and 4%, which represents 18% of the credits granted. 3.3% of home loans were between   4% and 4.5%, only 0.1% of the volume fell from 4.5% to 5.5% nominal rate. No loan has been granted above 5%.

3.14% loan rate for new real estate

In December 2019, the average nominal rate in new construction was 3.14%, compared to 3.04% in November. The rise in the interest rate is therefore significant: + 0.1%. This trend also follows the evolution of the price per square meter of new real estate, observed in November 2019.

3.06% nominal rate in the former

In December 2019, the average nominal rate for acquiring old real estate was 3.06%. It was 3.11% in November 2019, which therefore represents a drop in rates of around 0.5%. Again we note that the nominal rate drops as does the price per square meter in the old one.

The average duration of mortgage loans

17.2 years in December 2019

The CSA / home loan study shows that the average duration of repayment of mortgage loans granted in December 2019 will be 17.2 years or 206 months. In November 2019, the average duration of repayment of loans granted was 16.8 years. It will, therefore, take a few more months for first-time buyers to repay their loans.

A majority of reimbursement from 15 years to 25 years

The report shows that 31.2% of the real estate loans granted in December 2019, will be repaid over a period of between 15 years and 20 years. Next comes the 20 to 25-year bracket, which represents 29.2% of the credits granted. We borrow very little over a period of more than 30 years: 0.3% only on the volume of financing granted in December 2019.

The cost of real estate financing

Always cheaper

First time home buyers who obtained their financing in December 2019, will need 3.86 years of income to pay the cost of their loan. In November 2019, this duration was 3.89 years. We, therefore, observe an increase in the duration of reimbursements for a drop in the cost of these same reimbursements. However, this observation should be delayed, because it is only an average.

Reminder on home loan fees

It is reasonable to count an additional 8% on the price of an old property, and 5% on the price of new housing. This additional cost is explained by the presence of notary fees and bail or mortgage fees. Remember that the 2014 finance law allows departments to increase transfer taxes from 3.5% to 4.5%. We will probably have to wait until the end of the first quarter of 2014 to measure the impact of this likely increase in the cost of homeownership.

Banks have lent more

Borrowed amounts on the rise

This is good news, in December 2019 the average amount of home loans increased by + 23.3%, compared to December 2012. In November 2019, this amount also increased by + 19.1%, compared to November 2012. As the prices per square meter of new and old did not change significantly, it is reasonable to deduce that less contribution is necessary to become an owner. However, prospective buyers must keep in mind that each file is a unique case.

No more home loans

December 2019 was a good month for both banks and buyers. There were 15.9% more mortgage loans, compared to December 2012. In November 2019, there were 9.9% more mortgage loans granted, compared to November 2012. We are therefore really facing a positive development of the real estate financing market.

Good Finance reached 2 billion dollars of credit production in 2020. This record production is linked to the environment of very low rates contributing to the solvency of borrowers. What is the national production? How is this record production explained? What are the prospects for 2019? Analysis.

In 2020, loan production from Good Finance, a network of 150 credit brokerage agencies, reached 2 billion dollars for the first time, up 28% compared to 2018. This record production is linked to the context of low-interest rates. which led to a sharp increase in demand for credits and renegotiations. It is also explained by the opening of 30 new branches and by the recruitment of 190 employees within the network, with a total now of 500 employees.

Over 10,000 clients funded

In 2020, the credit production of the 150 franchised agencies of the Good Finance network reached 2 billion dollars, against 900 million in 2014 and 1.5 billion dollars in 2018, representing a growth of 28%. More than 10,600 loan files have thus obtained financing from the broker Good Finance (compared to 8,700 in 2018), 30% of which as part of a loan renegotiation (35% in 2018).

“We are very satisfied to have reached the threshold of 2 billion dollars in loan production, an unprecedented figure since the creation of the Good Finance network in 2008. If the start of the year was rather sluggish, the rate context low, the widening of the zero-rate loan, and the craze for the Pinel device have boosted our activity.

But it is also and above all thanks to the extension of our network with the recruitment of 30 new franchisees and 190 financial advisers this year that we were able to achieve our objectives ” analyzes Jérôme Robin, president of Good Finance.

Record mortgage production in 2020

At the national level, 2020 should also be a record year in terms of credit production. According to the Banque de France, at the end of October, the cumulative production of new loans reached 188 billion dollars, a figure up by 10% compared to the same period in 2018. “The production of new mortgage loans could reach 230 billion dollars in 2020, a new record, well above the 200 billion credits produced in 2018.

No one could have expected a rate cut of almost one point over a year and the new wave of renegotiations loan resulting from it… For 2019, even if we are still receiving the latest requests for redemption of latecomers, the activity should be supported only by acquisitions, allowing a return to normal on the processing times in banks ” foresees Sandrine Allonier, Director of Bank Relations for Good Finance.

Banks finance 150 homes per hour

According to the Banque de France (Stat info credit to individuals at the end of November 2020), outstanding home loans (which includes new loans) amounted to 891 billion, an increase of 3.9% compared to to 2018. Since the start of 2020, banks have issued more than 22 billion dollars in new loans each month. And even 27.5 billion dollars in November 2020. The results for December are being processed.

“Banks finance 150 homes per hour in France,” according to the French Banking Federation, in a study published in January 2019.

Note that a quarter of the loans are granted to first-time buyers.

And 30.2% of households benefit from a home loan according to the January 2020 Household Credit Observatory (CMO).

Absolute record low rate in 2020

2020 ended on an all-time high, despite a slight rise in rates at some banks in December. Rates remain historically low: 1.56% according to data from the Banque de France, with regard to new mortgage loans, all amounts, long term and at fixed rates, at the end of November 2020.

Throughout my articles, you may have understood that I did not carry consumer credit in my heart. In truth, it is because I see too many tight budgets because of the monthly credit payments that accumulate. However, well used, consumer credit can be a real valve for your budget.

Information: this article was inspired by the last infographic published by Lite Lending, from which the illustrations are taken, but is not a sponsored ticket.

 

When to use consumer credit?

Your budget is under control

You know your income, your expenses, you know what your safety margin is,

You will not run after money after the 20th of the month because you manage reasonably by having fun, you distribute your expenses.

You may be saving on a regular basis, and you know how much financial effort you can make for extra credit without putting a knife in your throat. In short, you are a rational, a budget addict. And in this case, that of a controlled budget, yes, credit to the consumer is possible.

 

Your budget is large

You may not know your budget as well as a budget junkie, but you do know what your margin is, and it is more than enough to pay the monthly credit you are considering and leave you the margin.

In general, your income is quite high, you like to have fun and the amount borrowed is quite large.

You know how to manage your money, you know your financial situation, you will have no problem paying off your loan.

 

You need a large amount

Purchase of durable goods such as a car, work in the house, equipment … you need a fairly large sum, but either you do not have it available or you do not want to touch your savings.

If you know that you will be able to repay your loan without your budget suffering, why not consider consumer credit? This would allow you to keep your emergency fund, to continue to make it grow a little if it is not important enough for your taste. As a reminder, I advise you to have at least 1,500 dollars aside, and ideally to have the equivalent of 3 months’ salary.

 

When to avoid consumer credit

This is an impulse purchase

Want to crack on a new sofa without any real use, on a crush? A bad day at work and a trip to the Balearic Islands catches your eye? A meeting with a friend to discover the Thermomix and you plan to do it 12 times free of charge?

I am not telling you that these purchases should be avoided at all costs. I’m just telling you to avoid making major purchases without thinking about it for at least 48 hours. Even a week. And that you should never, never, use a credit for an impulse purchase without knowing your debt capacity.

 

You have management difficulties

Either your budget is tight, or you do not know it precisely, but in any case, the end of the month is difficult and you are already struggling not to be overdrawn. In these cases, for me, credit is a bad idea. You will add a burden on an already heavy budget, and increase your stress.

Rather than resorting to credit, already make a good point on your budget (do not hesitate to ask for help), go to your bank advisor to study the solutions available to you. Believe me, he will appreciate your openness and be better disposed towards you.

 

You want to fill an overdraft

I already detailed it in this article, but filling an overdraft with a credit is a bad idea if you don’t know why you are overdrawn. You will treat the symptoms but not the disease. Again, do not hesitate to contact your bank advisor.

But we will remain positive: 88% of borrowers repay their credit without difficulty, perhaps because the legislation has become more protective of consumers.