The application fees are part of the factors to consider to optimize your mortgage . Indeed, although their percentage may seem insignificant, the difference they represent between two offers can make all the difference especially when the amount borrowed is low.
It is therefore relevant to know exactly what they correspond to and from which banking institution we can hope to find the best financing .
- 1 What are the fees?
- 2 When to pay the fees?
- 3 How much to expect as a processing fee?
- 4 Why use a broker to negotiate fees?
- 5 Which is the best bank in terms of fees?
What are the fees?
The application fees correspond to the remuneration received by the bank for the study of your request for financing and the setting up of the conditions of repayment . It must be said that the examination of the file requires time and involves verifications as to the accuracy and veracity of the documents provided and the information contained therein.
Thus, the search for the best mode of financing to propose to the client according to his profile, the calculation of his monthly income and his expenses, the evaluation of the risks related to granting him a loan … constitute as many justifications to the perception of file fees by the bank .
When to pay the fees?
It should be noted that the borrower is only liable for the file fees to the banker who has actually lent him the capital necessary for his real estate investment.
The application fees are only due when the mortgage has been granted . The payment of the file fees then occurs at the end of the procedure, that is to say when the funds are made available.
Depending on the negotiations undertaken with the bank, they may be paid on the basis of the borrower’s personal contribution or at the time of payment of the first loan term.
It should be noted that processing fees are most often excluded from approved loans such as the zero-rate loan, while sometimes their removal is a way for the bank to attract new customers to take out a loan. .
How much to expect as a processing fee?
The fees are calculated according to the amount borrowed. It is then between 0% and 1% of the capital in the particular case of the mortgage. Indeed, this rate will vary according to the type of borrowing solicited and the bank chosen by the borrower.
In practice, the application fees are then between 0 euros and 1000 euros. It is rare that they exceed 1500 euros. They are most often considered by banks in a minimum and maximum amount.
It should be noted that these fees are taken into account in the calculation of the Annual Effective Total Rate known as TAEG. This is one of the most important indicators in assessing the final cost of a home loan.
Speaking of amount, it is not superfluous to recall that the fees are also part of the negotiable fees in any loan application since for the banker, they represent only a small part of the final cost of credit compared by example at the interest rate .
Why use a broker to negotiate your fees?
This negotiable nature of the fees justifies more than ever the need to put the banks in competition before making his choice, but also to call on a broker , more able to extract all possible concessions from the banker on the fees and other factors that could lower the cost of mortgage.
Indeed, this professional knows how to present the file to the banker especially when it presents complications that are likely to justify above average file fees.
Finally, as in the case of interest rates, the fees are set by banks following a policy that belongs to them without ever being completely similar from one institution to another.
It is therefore not surprising that they amount to a different amount in the offer offered by each bank for the same capital borrowed.
What is the best bank in terms of fees?
As we said above, each bank sets its own policy in setting fees. Thus, the best bank will be the one that will delete them entirely because the customer asks it.
Most often, the reason for the agreement is that the customer has an engaging profile that eliminates these fees does not lose much to the bank compared to what it earns by adding a new customer to its list.
However, there are even better banks in terms of fees, those whose policy is precisely to charge no fees regardless of the profile that comes their way. These are essentially online banks such as Bforbank , ING Direct, Boursorama Banque or Fortuneo.