When a household wishes to buy a property whose amount is greater than 75,000 dollars, the latter will turn to the mortgage. It is a credit that allows access to the property and/or to finance work in real estate. The peculiarity of this financing and to propose a rather long duration as regards the repayment of the debt. On average, the French are in debt over a period of 25 years as part of a home loan, this, therefore, means for the bank to ensure that the borrower will be solvent and able to repay the full amount due.
Establishment of a home loan will follow a very specific path
Whether this request is made online, with a broker or in a bank agency, there will be systematically a study which will be carried out by a financial adviser in order to check the borrower’s solvency but also the consistency with of the real estate acquisition project. Several information will be requested such as in particular the amount of the mortgage, information concerning the situation of the borrower (married, single, children …) and figures on income as well as household expenses.
What does the bank verify in a mortgage?
The bank will carry out a series of checks as to the situation of the borrower and his financing project. The first will simply report to the identification of the applicant, which will require proof of identity document. The bank will then check the applicant’s creditworthiness by requesting information relating to the household’s income and expenses. As a credit institution, the bank has an obligation to check the borrower’s debt ratio and to ensure that the latter does not exceed 33% after taking out the mortgage loan offer. To this is added the amount of the remainder to be lived which must be sufficient to allow the households to continue to live in a serene way.
Other verifications will then be carried out by the financial advisor, they will concern the salary statements, the idea being to verify the regularity of the incomes as well as the situation of the employment contract. There will also be an audit of bank accounts to ensure that the borrower is in a balanced situation. Finally, the bank will interrogate the Banque de France file to check whether the borrower is not the subject of a filing, which could lead to a refusal of financing. All these elements will be swept away during the financing study, it is only after verification that the bank can make a financing proposal taking into account the request of the borrower. Note that all of these steps are free and without obligation.