How long does it take to get credit? It’s not the same for real estate or a car, as we will see…
The expectation of the credit agreement is sometimes endless…
Compare our best credit offers zero-rated and other assisted loans. But always with my example, in the event that I can get all the money at zero rate, I know that I could not go beyond 250,000 euros.
I can say goodbye to the house on the French Riviera with pool.
Knowing what you can buy is fundamental to make sure you are not mistaken when approaching the real estate seller. If you get a trade-off on something you can never buy, it’s nothing but lost time and a broken dream. Asking for unrealistic credit, well above one’s means, is the best way to wait for nothing and waste everyone’s time.
Chronology: I got my sales agreement on November 12th. It is stipulated that the sale must be completed within four months, before March 15th. It is a sufficiently long period in theory to be able to obtain a mortgage. This is a small additional mortgage, representing about a quarter of the total price of the apartment. The concern, and I know it, is that I am a company manager, wanting to buy in another country of the European Union: better to have a very long time!
I wanted to buy a house in Portugal).
Documents gathered for one bank also work for another, with some subtle differences. Here is what the specialized bank (who does not know me) asked me to study my mortgage application:
- Promise or compromise of sale, indicating: amount of the purchase, amount of the desired credit, possible duration of the credit not to exceed
- Copy of the identity documents of the credit applicants
- Last tax notice
- The last 3 payslips, proof of income, rental income, retirement, or other… (any type of income in general)
- If credits in progress, depreciation tables
- Breakdown of the insurance of the borrowers (100% each, 50% / 50%, 100% / 50%)
- Real estate: type of property (apartment, house, land…) and current value; financial wealth: type of investment (booklets, CEL / ELP, life insurance) and amounts held on these investments.
- Extracts from your bank accounts over 3 months.
All this is normal, especially if you are applying to another bank than yours. It assumes that I am on a permanent contract. In order to grant a loan, the banks often demand to pay their salary or income.
The bank that holds my business account has asked me almost the same thing, with some differences: it knows me better, and knows that I am a business owner, married. Here is his list:
- Compromise of sale, and if you have not yet signed a compromise, the purchase price and the distribution of expenses (notary, agency)
- 2 latest tax notices + land declaration (or tenants’ lease)
- Last 3 balance sheets of your professional activity
- Amortization table for loans in progress (mortgage loans, consumer loans)
- Property tax of buildings you own
- 3 last statements of accounts (professional and / or personal) of other institutions
- Proof of your personal contribution
- If Mrs. participates in the loan, the proof of her income.
Based on these documents, the banker can then draw up a financing proposal. At this stage, there is no thorough verification of documents, everything is at the level of good faith of the applicant. It is not useful to cheat on the documents, they will always be checked later.
Chronology: For my part, my first contact with the banks took place around November 15, three days after the signing of the sales agreement. The first requested documents were sent on November 26th.
good bank advisor is just as good! An advisor who is accustomed to working with business leaders will certainly be of great help as the “default bank advisor” who has to respond to credit requests from people who are not their clients.
Very good to know, if you want to save time: provide immediately all the documents that I tell you, without waiting for you to be asked. We can not trust the advisor entirely: he does not accept the mortgage! This is often a committee, which will decide whether to grant the loan or not. For my new bank, where I ask for the credit, the committee meets once a week and can ask for… new documents.
Agreement in principle
After sending my last documents on January 20th, I finally receive an email on February 3rd announcing that I have obtained an “agreement in principle”. For the moment, everything is going very well, even if it took me 3 weeks to get this deal. Let’s not forget, my situation is complicated because I am self-employed. In any case, it remains more than a month to finalize the loan on time.
But with this agreement in principle, I am still asked for documents, including:
- Copy of the Dividend Distribution Minutes to confirm my income,
- Proof or document showing the monthly rent received
- What is the guarantee taken by the current bank for loans in progress
Verification of the credit file and its documents
The astronomical quantity of documents requested for such a small credit (I remind you that we are talking about a quarter of the total sum, the rest being personal contribution ) still amazes me today, several months after the fact.
As we can see, all the documents we have provided require time to check. The bank will not do it quickly, it will peel carefully each document: it does not lend several tens of thousands of euros at a preferential rate as can be a mortgage without making major checks! In addition, the bank is not alone in checking and giving its final agreement: we must also rely on the bonding agency.
In my case, it is this organization that has complicated everything.
look at the section “mortgage surety to buy in Portugal”. I write that precisely, there are two validations to wait before obtaining a credit “bonded”: one of the bank, and another of the SACCEF or Credit Housing.
The request for study of my file is really part with the SACCEF March 5, all the previous period does not count.
A huge advice: you have to relaunch the advisor permanently. Once a week at least, you have to come to the news. It should be noted that if I had not made a raise, I would still be waiting for my file to reach the SACCEF. I repeat: a good advisor who knows you is vital.
On March 15th, faced with this unexpected event, I am forced to ask for an amendment to my sales agreement. I manage to extend the deadline to buy the apartment for an additional month, until April 15th.
It should be noted that the extended delays in obtaining the credit agreement and the bonding agreement are not exclusive to the bank where I spoke to: with very low interest rates, many people also makes a request for mortgage credit, to which must be added all those who have made a request for repurchase of mortgage. It is a surplus of work for the persons in charge of validating the files of credit, and thus an extension of the deadlines of response of the banks.
Nevertheless, attention: I also made a request for repurchase of real estate credit with my classic bank. From the credit surrender request on May 5th to the signing of the new contract on May 26th (cooling off period included), we have only three weeks. Yet, I’m not more on a permanent contract than for the mortgage: I just spoke to my other bank, which has known me for a very long time. The overwork of the banks does not explain everything!
Compare our best insurance offers
This insurance is also subject to validation, but does not pose any particular difficulty for my case: I am in relative good health, it took me only a few days to obtain the validation of my insurance. But it can be a real blocking point if you want a credit when you are disabled (article eKonomia) where you want a mortgage when you are retired…
How long to have money from a credit?
When making a mortgage, especially if you are a “complex file” as can be someone who is self-employed and would like to buy a house abroad, ask a credit to your different banks, first, where you hold your business accounts.
Even if you do not compete too much, you know that the proposal will be at least satisfactory, and the credit will have the merit of being unblocked much faster than in a bank where you are not a customer. For a few hundred euros, no need to risk losing the apartment of your dreams!
If making a mortgage is not a problem, then we can do without the validation of the Housing Credit or SACCEF: here, we can play the competition thoroughly, the final answers of banks coming in less than a month. Finally, if you are on a permanent contract, it is undoubtedly simpler, everything goes faster: a month to get a firm offer of loan on average, unless you already have of course too many credits on the back.