How much can I borrow to build? | Home Loan
Like many French people every year, do you want to embark on a house construction project? You need to know your ability to borrow from banks in order to be able to define your individual house construction project with precision. Here is a guide allowing you to better quantify the amount of your home loan according to your repayment capacity.
Calculate your ability to borrow to build
The first essential step in a house construction project is to first find out how much you can borrow. It is therefore a question of submitting a mortgage loan simulation request, specifying its financial and personal information, namely the amount of its income, the amount of its charges, any credit outstanding. All this information will help calculate the household debt ratio, you should know that ideally you need to have a debt of 33 percent according to financial authorities.
Based on the debt ratio not to be exceeded, we can define the maximum amount of the monthly payment that could be reimbursed by the household and therefore plan over different durations the total amount that can be obtained under a loan immovable. This calculation proposed in the home loan simulations makes it possible to obtain a loan amount adapted according to the finances of the borrower and his project, in this case the construction of a new individual house.
Define the amount of the mortgage for construction
with the estimate of the amount of home loan that can be obtained from different banks and credit institutions, the borrower can therefore turn to home builders to obtain a quote for the realization of his home. there are several elements to take into account in the construction of a house, starting with the acquisition of the land (serviced or not), the cost of construction of the individual house but also the various costs that may occur.
You should know that in the construction of a house, there are always unforeseen circumstances, there are also options that are not necessarily included in the starting price such as for example electric shutters, carpentry in the colors of the roof or a designer entrance door. Other costs related to the mortgage are also to be taken into account, we are talking about application fees, guarantee costs (deposit, mortgage) but also possible brokerage fees if you go through a broker.
Simulate a mortgage for new construction
It is strongly advised to carry out a real estate loan for construction in order to be informed firstly of your ability to borrow and secondly of the loan conditions currently available.
The result will be used to define the amount of land you can buy but also the amount of construction and necessarily the area in square meters. a more attractive rate with another bank can make you go from a single house project from 100m² to 110m² or even 120m². It is therefore important to compare the proposals it is early to optimize the construction of your new house.