The use of a bank loan is often necessary in the context of a real estate purchase. Contrary to what one might think, it is not just the rate to negotiate to reduce the cost of borrowing. Certain additional costs can indeed quickly increase the bill! Here are 5 to negotiate with your banker.
Costs n°1: application fees
For a bank to grant you your financing, you must show your credentials. To do this, you will create a file containing all the necessary documents. Your objective: to prove that you are able to repay the mortgage. This file represents a cost for the banker, who checks all the supporting documents and establishes a diagnosis of your situation.
“The more the bank will deal with a simple and fast file, the more it will be open to lowering the amount of the fees“
These application fees are equivalent to approximately “1% of the amount borrowed, respecting a range between 500 and 3,000 euros, which differs according to the banks“, clarifies Erwan Pengloan, credit broker and wealth manager. All establishments charge for them and they are indicated in the tariff conditions. The good news is that they are negotiable. Their amount depends on the “difficulty of the real estate project, it will be more difficult to negotiate them for complex cases“. The more the bank will deal with “a simple and fast file, the more it will be open to lowering the amount of fees“, assures the founder of Erwan Conseils. For example, if the client already has a specific project and does not need “multiple simulations requiring adjustment of the amount of contribution and loan”, it will be easier to negotiate a discount.
Conversely, fees are more difficult to reduce for certain borrower profiles such as “professionals, the self-employed, business leaders, entertainment workers, temporary workers, etc.“. These profiles must provide more documents than an employee on a permanent contract. “The larger a file is physically, the longer the human processing time will be“, sums up Erwan Pengloan. Ditto for customers with large assets and who will have to multiply the supporting documents.
Costs n°2: borrower insurance
Borrower insurance is not legally compulsory but, in fact, the bank always asks borrowers to take it out, because it will take over in the event of death, disability, or prolonged sick leave, depending on the guarantees. of your contract. The bank is thus guaranteed to be reimbursed. You have two options: choose bank insurance or prefer a delegation, so turn to an external insurer. By experiment, “the majority of customers take that of the bank when signing the contract, but not all of them keep it for the long term“, says Erwan Pengloan. Indeed, the law of February 28, 2022, called Loi Lemoine, offers the possibility to the subscriber of the loan to change borrower insurance at any time and without penalty.
“Fifty-somethings have less interest in using a delegation of insurance than younger generations“
Good to know, “on the senior category, the cost of insurance from the bank or the delegation is almost the same“, says the brokerage expert. You should know that a “bank offers insurance with a shared cost, so it will be less careful about the state of health, unlike delegated insurance“, explains the broker. If the person declares himself a smoker, he may have an additional cost of “40 to 50%” via external insurance. Thus, fifty-year-olds have less interest in resorting to a delegation of insurance than the younger generations, for whom the cost can “to be divided by three“. But you can always try to play the “competition, because it is often in this context that the bank can agree to make a move“, advises the broker. “When you subscribe to that of the bank, the latter may suggest a more interesting rate“, added Erwan Pengloan.
Costs n°3: early repayment indemnities
A mortgage commits you to 15, 20 or even 25 years. Thus, it is important to see in the long term and to imagine all possible situations. In this period of time, your remuneration may change, you may have a return of money or move… Therefore, the negotiation of early repayment indemnities, or IRA, becomes essential. Indeed, if you wish to repay your loan before the end date, partially or totally, the bank will apply compensation. The amount of the latter, fixed in the loan contract that you sign, never exceeds the thresholds provided for by law, namely:
- Maximum 3% of the capital remaining due before reimbursement;
- Maximum 6 times the interest of the current month at the time of reimbursement.
“You can negotiate these indemnities in return for investing your savings in a savings product“
In the current context, it is difficult to “negotiate a total exemption, but cut the pear in half and obtain an exemption after 5 or 7 years or a partial exemption is possible“, assures Erwan Pengloan. It is important to explain to the banker “for what reasons, you may be required to make an early repayment” and to justify that it is not “out of comfort, but out of necessity”. The broker also indicates that he negotiates IRAs for his clients in the context of bridge loans. The talks involve a give and take, he recalls. he however.”For example, you can negotiate your IRAs in return for investing your savings in a life insurance contract.“.
Charges n°4: bank charges related to the opening and operation of the account
Since the Pacte law of 2019, banks no longer have the right to condition the granting of a mortgage on the domiciliation of the borrower’s income. In fact, they often use this argument to promise borrowers a lower interest rate. Do not hesitate, on your side, to negotiate the costs related to the opening and operation of the account, such as the bank card contribution if you take one. “Lifetime discounts are rare, concedes the manager of Erwan Conseils, but it is possible to discuss free bank cards for the first year or years or even to have a Visa Premier for the price of a classic Visa.“
Fees No. 5: brokerage fees
Beyond the bank commissions they collect, many brokers charge brokerage fees to their clients. These are usually “from 2,000 to 3,000 euros“, Erwan Pengloan’s chiffre.
Negotiating brokerage fees will be easier for a first-time buyer on a permanent contract
Negotiating broker fees down is possible. Everything will depend, again, on the complexity of the file and the hourly volume of work that it will require. This will, for example, be higher for a multi-owner. “The greater the quantity of documents to be provided and analyzed, the greater the working hours will be“, argue the expert.
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2023-05-02 09:49:59
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