Today, different types of credits exist to finance a property, there are many solutions depending on:
- The type of dwelling (investment, principal residence or second home);
- The age of the dwelling;
- The financial situation of the borrower;
- From the housing area to finance.
The classic home loan
This type of loan does not fit into a defined regulation. Indeed, it depends on the banking institutions. Thus, the duration can be variable and negotiated, but falls in an average of 20 to 25 years. Generally, the higher the amount of the loan, the longer the repayment period.
In concrete terms, the bank chosen must send a loan offer by mail to the borrower. The latter can accept the offer only from 10 days following receipt of this offer. In addition, he has 30 days to accept or refuse. The loan amount can not be less than $ 75,000 but has no maximum value.
The interest rate varies by credit institution. It can be fixed, variable or modular.
In Fine Loan
This loan works in contrast to a depreciable real estate loan. This is the repayment of the amount borrowed with interest divided into monthly installments. In fact, the repayment installments applicable to the In Fine loan only include interest on the amount borrowed, and the borrower therefore reimburses the total amount at the end of the loan.
In parallel, financial institutions lenders ask to have a savings account (usually life insurance) dedicated to the reimbursement of the final amount. The solvency of the borrower is verified regularly, to ensure repayment at the end of the loan.
The maximum loan term is 20 years and is for anyone wanting to finance a rental purchase.
In this type of loan, the amount of interest remains fixed throughout the repayment, and is greater than a conventional loan. Its annual percentage rate (TEG or APR: interest rate + fees and guarantee + insurance premiums) is therefore higher.
However, in general, the borrower has the advantage of being able to repay a smaller amount each month and can benefit from more time to repay the total amount.
The Housing Savings Plan (PEL)
The Home Savings Plan results from a savings account opened by the borrower, with a life of 4 years. Beyond that, the person can use his savings in different ways. It is thanks to this savings that he can negotiate a mortgage at a particularly attractive rate with the bank in which he owns his ELP.
The amount can not exceed $ 92,000, and repayments are made over a period of 2 to 15 years.
The interest rate varies according to the date of opening of an ELP: for example, for an opening of an ELP from 1 August 2016, it will be 2.20%.
The Housing Savings Account (PEL)
The CEL guarantees a preferential rate in case of acquisition of housing or real estate work. In order to obtain this loan, the account must have been open for more than 18 months. It must also have generated interest, depending on the activity to be financed (works, construction or acquisition).
Like the ELP, this preferential rate loan is carried out most of the cases in the bank where the account was opened.
Its amount can not exceed $ 23,000, and must be repaid between 2 to 15 years.
Its interest rate is variable, and is calculated based on the savings period on the account.
The loan agreement
This type of mortgage is granted by financial organizations with an agreement with the State. Its interest rate is generally larger than a conventional home loan, because this credit has the advantage of being able to benefit the borrower Personalized Assistance Housing (APL): they contribute to reduce the amount of monthly payments of a credit immovable).
Another advantage is that this loan does not require any means test, no personal contribution, and allows you to benefit from notary fees lower than traditional loans.
Its duration can range from 5 to 35 years.
The zero interest loan (PTZ)
This pêt is specifically reserved for people whose resources do not reach a certain ceiling, and to people who have not been owners the 2 previous years. It is only offered by financial institutions that have entered into an agreement with the State for the acquisition or construction of a principal residence.
Its amount depends on the region where the housing to be financed is located. It is defined by applying a certain percentage to the total cost of the acquisition, and therefore can not finance the housing in its entirety, because its amount can not exceed 40% of the total cost.
The duration of the repayment is also based on income, household composition and housing region. It is usually 20 to 25 years and includes a deferral period, ranging from 5 to 15 years, during which the loan does not have to be repaid.
The Social Accession Loan (PAS)
Like the loan agreement and the loan with zero rate, this type of credit is granted only by the financial organizations having an agreement with the State, and allows to finance only the principal residence (work of at least 4000 $, construction or purchase). It does not require any personal contribution and can finance the operation in its entirety. However, the social loan does not participate in the notary fees.
This loan can only be accessible to people who do not exceed a certain ceiling of resources, depending on the area of residence and the composition of the home.
The repayment of this loan can range from 5 to 25 years (or 35 years exceptionally).
In conclusion, the different mortgage solutions are adapted to each financial situation. The borrowing conditions, the duration, the amounts are not the same depending on the type of credit chosen. Some of these credits may also cumulate. In order to benefit from the best loan, please turn to your banker so that he can direct you to the type of loan adapted to your needs. Remember that a credit commits you and must be repaid. Finally, do not hesitate to go to several financial institutions to get the best rate for your credit by playing the competition.