Building your dream home is an exciting life stage, but it can also be a significant financial investment. To carry out your project, you may need a suitable mortgage. SIC houses, a builder of new homes in the Southwest for 50 years, notably calls on brokers to help their clients set up their real estate project.
Whether for the amount borrowed, the repayment period, the interest rates or the guarantees requested, discover all the essential information to help you choose the best financing solution for your home construction project.
1st condition for obtaining a mortgage: income stability
Vincent Nadeau, insurance broker / real estate loans and agency manager Ashler & Manson de Bordeaux Quinconces has been supporting Maisons SIC clients for many years in their mortgage project for the construction of individual houses.
In this context, it sheds light on the 5 prerequisites that exist in France to obtain a financing solution.
The first prerequisite is to ensure income stability. The first questions that a bank will ask to decide whether or not to grant a mortgage will be: do you have a stable job, are you on a temporary contract, on a fixed-term contract or looking for a job?
As confirmed by Vincent Nadeau, a bank wants to have security on the nature of its customers' income in order to be able to process a file: either a permanent contract with a valid trial period, or a population who works temporarily by choice and on a long-term basis, that is to say for at least three consecutive years.
Or, for example, intermittent workers in the entertainment industry, with real long-term employment. It can also sometimes be fixed-term contracts for people who work in the medical field, on a very regular basis.
Income sustainability is a very important condition for the granting of a home loan and, for customers who are not part of these first audiences (a business manager, a craftsman, a merchant, a self-employed entrepreneur), the analysis will be significantly my same: “that is to say a precedence period of two to three years. Except for the medical professions on which banks have more visibility and are guaranteed to have sustainable income. For a medical profession, the anteriority of one year will suffice. On the other hand, for all the other professions, it will take three years of hindsight on the economic activity of the company, to be able to generate income on a professional basis and build the file. »
2nd condition for the mortgage of a construction project: personal contribution and residual savings
If you wish to obtain a mortgage to build your new house, you must then take into account the notions of personal contribution and residual savings after draft agreement.
Today, for a construction project, as Vincent Nadeau explains, "You have to count about 5% of personal contribution on the project. That is to say that if you buy land at 100 euros, you have a house built at 000 euros, it will be necessary to provide 200% of these 000 euros as a contribution to the project. On a construction project, it will therefore really be necessary to be able to provide the bank with around 5% of the total amount of the project. And above all – and this is all the more true for a construction project – residual savings. »
What is residual savings? A concrete example: you have 40 euros in pre-project savings. For example, you will put 000 euros into the project, you will have 20 euros left in residual savings.
The minimum residual savings required by banks is, on a construction project, around 10 to 15 euros. Today, for example, no bank will agree to finance a construction project for a couple for whom only 5 euros of residual savings will remain.
What are the reasons for this demand for residual savings on the part of the banks?
When we build a house additional costs may appear, linked to the evolution of the prices of materials, for example. As well as many induced expenses, for the fence, the terrace, various and varied costs that are put in place once the construction has taken place.
In order to secure the real estate project, the banks then ask the project leaders to justify a financial situation that is comfortable enough for the bank to be able to position itself.
3th pre-requisite to construction mortgage: the debt ratio.
Today, the bank can support project leaders up to 35% of their income. The notions of debt ratio are very strict, as verified by the High Committee for Financial Stability. There are no more possible derogations.
To accept or not a mortgage project, the banks will take into account all the loan charges: an LOA (Rental with Option to Purchase), a car leasing, any consumer loans... All customer loans will be included in the calculation of this debt ratio. And the maximum possible debt is now 35%. No more.
4th mortgage condition: disposable income after project
Depending on the profile of the project leaders (just a couple with two people or a family of four), there are notions of “rest to live” which are carefully studied by the banks.
Vincent Nadeau adds: "These criteria may vary from one bank to another, but we have an almost common pattern: a couple who earn 1500 euros and who are in debt up to 35% will not have financing solutions because the rest to live after repayment of the maturities will not be enough to live properly. »
This notion is one of those on which brokers can greatly help project promoters to work, when a financing study is put together.
Concerning the profile of customers who do or do not obtain a mortgage in the context of a construction project, there is no longer a typical profile: “It can be a couple of first-time buyers, it can be a second project, people who have bought a first T3, who resell it and who plan to build a house a little further away to have a garden or even people who are in their fifties, who have already been owners and who want to build a nice house because it's the last project before retirement. »
For all these projects, Maisons SIC and its partners by Ashler & Manson have financing solutions.
5th condition for financing a construction project: the CCMI
There is a very important and relatively unknown concept, especially in the context of a mortgage project for the construction of new houses: the banks are very attentive to the fact that construction projects are drawn up with a CCMI, a construction contract for a detached house.
As Vincent Nadeau points out: “it is much more difficult to obtain the financing solution for a project that is not framed with a CCMI. Because there is then a legal framework which secures the banks and which, as a result, makes it possible to facilitate financing. »
Maisons SIC, professional builder of individual houses in the South-West, only offers projects supervised by a CCMI.