Making sure you get the most suitable property loan for your new home purchase

The first thing to do is to decide how much you need to borrow… and how much you’ll be able to borrow. You can work out both of these using our simulator.
It is also essential to find out about which property loans are available well before reserving your house or apartment. This will help you understand the loan offers you receive, identify any financial assistance you may be entitled to, and therefore negotiate more effectively with your bank.

As well as your bank loan, your property finance package may also include:

• a personal contribution: this could be some of your savings, a gift or a helping hand from your family,

• one or more approved loans or subsidised loans:
  
  • interest-free loan: depending on your revenue,
  • prêt épargne logement: if you have been saving in a Plan d’Epargne Logement (PEL) (long-term saving accounts for buying a home) or Compte Epargne Logement (CEL) (Home Savings Account). Our advice is to check carefully that the rate you are offered is competitive in the context of the market,
  • prêt conventionné (approved bank loan): a capped rate loan granted (subject to the price of the property) by lenders that have signed the appropriate agreement with the government and provides entitlement to APL (Aide Personnalisée au Logement) (Personal Housing Subsidy),
  • Prêt à l’Accession Sociale (PAS) (Social Ownership Loan): reduced rate loan for those on low incomes,
  • Prêt 1% logement (1% Home Loan): employees of companies with less than 10 employees can ask their employers for a property loan at an interest rate of 1.5 % (exc. insurance and guarantees),
  • Prêt Paris Logement 0% (0% Paris Housing Loan): this interest-free loan is granted by any bank that has signed an agreement with the City of Paris to finance home purchases for Parisian families.
    

Are you buying before you’ve sold your old home? If you are, you should consider a bridging loan. How does it work? Well, the bank advances you the money you need to buy your new property. To begin with, you repay only the interest. You repay the capital only once you have sold your previous property.

Ask your bank for more information: your advisor there will tell you which types of assistance you might be eligible for. You can then take the time to prepare your loan application with care.

Our advice is to approach at least 3 banks, brokers or loan companies. When you compare their offers, look further than just the interest rate.

• Compare the TEG (APR). This reflects the overall cost of the loan, including administration fees and the obligatory insurances and guarantees.

• Take account of the flexibility of the loans you are offered: can you postpone, reduce or increase your monthly payment? Are there penalties for early repayment?

• Ask for illustrations that will help compare amortisation tables more easily.

• Don’t restrict your negotiations purely to the interest rate; haggle over the administration fees, guarantees (mortgage, security, etc.) and insurances (life and sickness and, optionally, unemployment) too. You may well find a better deal elsewhere than the one offered by your bank! However, not all banks will allow you to take out any insurance other than their own (délégation d’assurance in French). Bear in mind that some insurers require you to have a medical examination whose thoroughness will vary according to your age, health (smoker or non-smoker) and the amount you want to borrow.

Tip: you can also apply to our partner Meilleurtaux for a loan. You’ll receive personalised offers within 48 hours. This gives you access to over 100 partner banks all over France.

When you receive a loan offer, you should consider it for 10 days before signing it and returning it on Day 11. A loan offer summarises the terms of the loan agreement: the type of loan, its total cost, insurance, guarantees, amortisation tables, provisions for postponing and modifying monthly payments, early redemption penalties, etc.
Your signature commits you to the bank and therefore determines the final choice of which bank to choose.

Any questions? Just contact your Bouygues Immobilier advisor!