In order to receive the best conditions for applying for real estate credit with a bank, the borrower must know how to highlight its characteristics. The study of a financing project is elaborated through its profile, which can be a means of pressure to negotiate the loan to its advantage.
The profile of the borrower, a bargaining argument
The banking market is currently in full swing. Competition is so intense that industry professionals are willing to make concessions to get new customers. Since real estate loans are appeal products, their utilities tend more towards increasing the customer portfolio than towards profitability. Indeed, low market rates and commercial offers do not achieve a comfortable margin. A future borrower must therefore be aware of its bargaining power and the financial potential it represents for a bank over the long term.
As a result, certain features of the profile need to be supported in order for the client to obtain favorable lending terms. Obviously, the bargaining power has a threshold to be determined. Because even if the borrower’s profile proves to be very attractive to the credit institution, the credit institution will not be able to allocate a miracle loan.
The age of borrowers
First of all, you have to know that age is an important criterion. Banks are constantly looking for young, high-income customers (25-35 years old) who represent potential for the future. To perpetuate the relationship with this typology of customers ensures a certain profitability. It is therefore possible to obtain benefits by advancing at a young age.
Revenue and budget management
Secondly, it is clear that occupations within the household will tip the scales in negotiations. For example, a manager can extract financing conditions that are more profitable than a simple employee. Higher incomes will extend the financing capacity while reassuring the bank. But resources must be accompanied by good budget management on a daily basis.
In addition, demonstrating potential for career development is also a strong argument. This will convince the lender as to the creditworthiness of the borrower until the end of the repayment. Future ambitions must therefore be valued by the lending institution.
Guarantees to be provided
Finally, a project to finance a property requires the provision of guarantees from the lender. But an interesting profile will just lighten the list of requirements of the bank, especially in terms of credit insurance. The conditions and the monthly fee will be reduced. Negotiating this insurance can save several thousand euros over the entire repayment period.
The non-practice of a risky activity or occupation
A point of vigilance is to be issued, however, towards people practicing extreme sports or risky trades. This criterion can lead to a drastic increase in the insurance premium.
To show oneself in its best light is thus essential. Households must be attentive to the banks’ appetite for certain types of profiles. A preparatory strategy must be developed to identify its “borrowing assets” and to expose them early in the negotiations. The purpose being to obtain the financing of his property by having appreciable conditions.