We are young thirties, owners of an apartment in Amiens bought $ 130,000 in 2011 that we reimburse over 20 years. We found a larger apartment bordering a park, close to my workplace for sale at 200,000 $…
So, we would like to know how can we do to buy this property, knowing that Amélie is currently unemployed and receives only a small allowance.
Can we consider this purchase …?
First of all, you must EVALUATE the amount of your real financing need: it is, therefore, necessary to add to the price of the apartment to be acquired, the additional costs (notaries, guarantee, etc.)
Then, to acquire this property you must sell your current apartment. Please note, you must, therefore, ESTIMATE your property. Indeed, the purchase price of 2011 will normally be lower than the sale price today.
Then, know how to know your outstanding credit. Note that in principle, the bank advances a quota (from 60% to 80%) of the value of your current property.
I imagine that you have assessed the amount of your financing need and that you have estimated your property?
Altogether, the amount of my project is $ 229,000.
This sum includes the amount of my future acquisition with administration fees, warranty fees, notary fees, and work costs of 10,000 $
We called on a real estate agent who estimated our property at $ 165,000.
In addition, we owe the bank $ 101,855
We also have a personal contribution of $ 16,440
Can you tell me what financial transaction is possible?
According to your information, the basic principle is as follows: you need immediately the amount represented by your apartment to buy your new apartment.
The bank will, therefore, advance part of this amount to you in the form of a bridging loan. The loan is a short-term loan between 6 and 24 months.
The amount of the bridging loan is a percentage corresponding to the value of your property which will be sold, from which your credit outstanding will have been deducted:
Either for you (60% to 80%) * 165,000 – 101,855 = 37,887 to 50,516 $ Of course, this amount alone is not enough to finance your new project!
Okay, concretely what financial arrangement is possible?
Project your financing on a percentage of 80% and use the formula just before described to finance “bridge loan” equal to $ 50,516. The bank will, therefore, supplement this financing with your personal contribution, ie $ 16,440.
In order to reach the amount of your project of $ 229,000, a classic amortizable loan will complement the financing mechanism at a negotiated rate of 2.3% over 25 years with the Good Finance, i.e. $ 162,044
For the calculation of your monthly bridging credit and repayable credit, you will need to add the cost of borrower insurance.
I grabbed the device, but my wife is unemployed and my income is not high: what if the monthly payments of the bridge loan added to that of the conventional loan are too high?
It is important to calculate your borrowing capacity.
If the monthly amount of the bridge loan is too high, you may be granted a total deductible of interest on the bridge loan. You have 2 years at the latest to repay your bridging loan.
In fact, at the end of the 24 months, you will have to repay the 50,516 dollars plus interest capitalized monthly with a rate of 4.3%.
Thank you, how to have a refined and personalized approach?
The best way to be supported on possible financial arrangements is to call on a credit expert who will take the time to advise you and study the documents in your file and enlighten you on the feasibility of the transaction in order to make complete your new life project!
Do not hesitate to contact a credit expert, free broker member of the Immofiances.net network to support you or simply advise you!