Some anticipated higher mortgage rates. To their surprise, rates continued to drop to an average of 2.94% in April 2014. In addition, all indicators suggest that they will stay at this level, or even drop further. You may already have a mortgage outstanding, or perhaps you are not yet an owner. Here are 4 things to do to take advantage of current loan rates.
Buying a primary residence
At this time, the average new mortgage loan rates are 3%. An apartment or a house at 250,000 $ reimbursed over 20 years would therefore give monthly payments of 1461 $ excluding insurance.
Considering that your debt ratio should not exceed 33%, you would only need income of $ 4,427 to be able to buy a new apartment.
The peculiarity of the construction is that several months pass between the date of purchase and the date on which one can actually move in. The banks therefore develop a repayment plan so that you can combine the payment of your current rent with that of the monthly payments.
The new has many advantages, starting with a 10-year manufacturer’s warranty. All construction must include a damage-to-work guarantee, allowing the owner to receive compensation in the event of poor workmanship.
The old one is generally cheaper than the new one, moreover the prices of the old real estate generally fell on the French territory. The most precise source to know the price of the old square meter in the Paris region is on the real estate prices map of the Paris / Île-de-France notaries chamber.
You will see for example that the prices per square meter in Maisons-Laffitte decreased by -7.3% over 1 year. A home that was worth $ 250,000 last year can therefore be purchased at this time for $ 232,000. If you get a mortgage with an average rate like in April ( 2.94% ), your monthly payments over 20 years will be 1349 $. You will need income of 4088 $ to access it.
Certainly the old may require some work, especially to increase energy performance. However, many aids exist, starting with the zero-rate eco-loan. The eco PTZ + allows you to get up to $ 30,000 at 0% to carry out renovations in your main residence. In addition, you can also get tax credits for home improvement.
Works carried out in old real estate also benefit from construction insurance, valid for 10 years.
Buying a second home
Buying a second home is always difficult to get a bank to accept, as there are multiple home loans. Borrowers therefore need to benefit from a solid profile, namely a low debt ratio and a stable professional situation.
Your future debt ratio will be reduced thanks to the low current mortgage loan rates. Falling prices for the old, and in particular for real estate in outlying areas, could allow you to make good real estate deals.
Invest in rental
A higher return than life insurance
The yield of a rental property ranges from 4% gross to 7% gross. Even before tax, it’s still better than the performance of life insurance in USD. The capital is not guaranteed, but it is relatively secure in the medium term.
It is possible to invest in a $ 100,000 studio over 10 years. If we just follow the national average for April 2014, you could get a rate of 2.94%. Note that your Voufinancer.com agency will do everything to get you an even lower rate.
Anyway, that would make you monthly payments of $ 993 without insurance. By counting on the worst scenario, that is to say on a gross rent of 4%, that would make you a monthly effort of 650 $.
Vousfinancer.com enjoys a privileged partnership with the Arthurimo agency. Credit counselors can put you in touch with their real estate adviser partners, to help you invest in rental property with the best possible return.
Reduce your taxes with rental investment
Whether it’s new or old, rental investment will allow you to lower your taxes. You have for this the laws Duflot (main residence, new or old) and Censi-Bouvard (new furnished residence). But that’s not all, if you are a heavily taxed taxpayer you could take advantage of the Malraux law (old character with renovation).
With the Duflot law, you can reduce your taxes by a maximum of $ 56,000 for 9 years. With the Censi-Bouvard law, you will best tax 33,000 $ in 9 years. With the Malraux law, you will reduce your taxes by a maximum of $ 90,000 in 3 years.
You can also invest outside the scheme, in the old one with works in order to create a land deficit.
Lower your monthly payments
Mortgage loan and consumer loan combined
If you have a mortgage loan in progress with one or more consumer loans, you can make a loan consolidation. If the weight of the real estate debt represents more than 60% of the sum to be regrouped, the buyer is obliged to grant you a real estate rate.
Concretely, you submit your request to the brokers of Vousfinancer.com. They determine the entire debt (real estate and consumption), then send your file to their financial partners. They receive the offers and present you with the best.
Objective: get a single monthly payment, lower than the total monthly payments you currently pay.
Home loan only
If you had borrowed between 2007 and 2009, there are chances that you will repay your mortgage with a rate between 4% and 5%. If you had borrowed in 2001, you certainly have a rate in excess of 5.5%.
Suppose you borrowed over 25 years 6 years ago, today you have 19 years of repayment. Your home loan repurchase would therefore consist in borrowing the capital remaining due over 19 years, with a rate that may be lower by 2 to 3 points.
To go faster, you can estimate the savings you could make using the credit buyback simulator. Let’s not forget that if you have made all your repayments so far without incident, then you present a good borrower profit.
All the more reason to negotiate an even lower credit repurchase rate.