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Loans: selection criteria

recent years, the variety of loan types has grown considerably. To you to take advantage of to minimize the impact of rising rates .

To choose your loan, be aware examine your current situation in terms of income but also your situation likely to maturity a few years.

Here are some guidelines for loans that you can choose according to your situation. Nothing you prevents however to opt for a combination of several types of loans so you do not put all your eggs in one basket. "

Interesting: some institutions (Woolwich ...) offer ready mixed couple in the same loan a fixed rate loan and a credit rate "capped".

Your personal contribution is very low or nonexistent.

In this case, you will definitely have you heavily in debt and over a long period. The amount of your repayments will reach the maximum, or 33% of your income. You earn

disadvantages here:

• variable rate loans are too risky for you as an increase in monthly payments could put your finances at risk.
• bank rates are higher for loans with long-term (20 years)
• interest costs over the term of repayment is often more expensive than the loan amount itself.

In this particular case, negotiate the ability to make prepayments without charge and "tighten your belts" the first few years in order to rapidly make such reimbursements.

You have a personal contribution and do not achieve maximum leverage.

Your personal contribution and loan schedules that you have subscribed you can make a loan which represent less than 20% of your income.

If you accept a small risk, you can opt for a variable rate loan secured that will allow you to get started as a lower rate of 0.5 1% to that of a fixed rate.
Several formulas exist:

• loans rate "abled" : the loan rate is variable, indexed on European interbank rates; but its maximum is capped at a "cap" set at the subscription of the loan.
• loans secured floating rate : You can get better rates than the previous departure. If rates rise, monthly payments are initially increased within a prescribed maximum (eg inflation), then if this limit is reached and rates continue to rise, the loan term is extended. Some banks offer specialized
  with this type of loan a maximum of 3 to 5 years on extending the term of the loan in case of elongation rates (Abbey National, Woolwich, Caixa, La Henin, ...)

You have a good supply staff and sound finances.

If you want to borrow over a short duration (less than 10 years) and accept the risk of a pure floating rate loan, meaning "without a net" then you can get unbeatable rates (1.5 to 2 percentage points lower than fixed rate loans!). Get

be made clear, however, the conditions of return to fixed rate to avoid any slippage. Compare in particular the increase resulting from the switch to variable rate fixed rate with the difference rate obtained with a loan / fixed rate when signing the contract.

You are a very good customer of your bank and have a large personal contribution. While negotiating

correctly, you can get a lower fixed rate of 0.5 to 0.8 points at the floor rate of the bank. In this case, the attractiveness of variable rate is significantly decreased.

Conclusion:

If the old adage "we do lend to the rich" is not quite correct, the fact remains that the conditions for obtaining your loan will be more Interesting that your financial situation is healthy.