How can you improve your file to speed up your purchase?

Most real estate purchases are financed by a mortgage, which most borrowers pay off over several decades, usually no more than 30 years. Much depends on the specifics of the property and the client's requirements for it. Before you decide on a property, you need to develop a financial strategy that includes an estimate of costs, cash flow and a borrowing goal.

When calculating your costs, be as specific as possible

Beyond the purchase price of the home, there are several expenses that must be saved before you can proceed with the purchase. While this is the largest expense, it is important to include all other expenses. For example, you will need to pay the notary handling the transaction so that he can collect taxes directly from the tax authorities, recover certain expenses (such as those incurred in requesting specific administrative documents) and pay himself. Insurance premiums, processing fees and other administrative costs may also be incurred.

Define the extent of your financial support

Obviously, you can consider all your resources, such as savings, inheritance or the amount from the sale of your current home, to meet all these expenses (if you are not a first-time buyer). To fill the gap between now and the time when you can sell your current home, a bridging loan can be a solution. The amount to be put down can be determined by calculating the capital available at the time of purchase.

A typical down payment is between 20% and 30% of the purchase price, depending on the lending institution you work with. If you can't come up with the money yourself, you can always ask a family member to be a guarantor or to mortgage another property you own. It is also possible to try to negotiate with the bank to reduce the amount of money required. With a government guarantee, buying a home is much less difficult.

If you have to borrow money, calculate your exact repayment capacity

After a review of your financial assets, you must evaluate your monthly income and expenses to arrive at an accurate debt capacity. In other words, this is the maximum amount you can spend each month to repay the loan without experiencing financial difficulties. Financial institutions generally recommend that this "effort rate" not exceed one third of your annual income.

Of course, you should reduce the term of the contract as much as possible if you want to spend less money on interest and loan insurance. The interest you pay on your loan will decrease as you pay it off. However, this decision will result in higher regular payments, so be prepared to provide for your family despite the unexpected. In the event of the insured's death, outstanding balance insurance (UBI) can provide additional protection. If there is an outstanding principal, the beneficiary of the insurance will receive that amount.

Plan your finances, but don't go it alone

Your capital acquisition strategy will have a better chance of success if it is more specific and well-founded. Don't hesitate to consult with experts before implementing it, as this will help you anticipate all costs and stay under the maximum debt load allowed by banks.

Lending institutions must have a solid foundation to operate and be able to provide a wide range of collateral. Before you start working, make sure you have your latest paychecks, salary certificate and published estimates.