A real estate acquisition should not be taken lightly. Before embarking on this “project of a lifetime”, you must carefully study your borrowing capacity, that is, the amount you can borrow from a bank.
I choose my section to be at the top on the subject! My personal contribution The zero interest loan Assisted loans How much can I borrow? What will my notary fees be?
Purchasing capacity and borrowing capacity, what difference?
Borrowing capacity is one of the elements that can be used to calculate your purchasing capacity, which is the maximum budget that you can invest.
Other factors come into play in the development of this budget:
- the personal contribution. This is the amount you invest directly in your real estate project. The personal contribution allows you to reduce the amount borrowed. It comes from your own savings (personal savings, capital obtained on the sale of real estate, donation, inheritance, money borrowed from a loved one…);
- getting a loan helped. There are many: the zero-rate loan or PTZ +, the PTZ Eco, the Social Accession Loan (PAS), the loan agreement, departmental loans such as Paris Housing loan or loan 92, loans Housing Action, the loan from an ELP… Note that 0% loans can be used as a personal contribution;
- notary fees. These fees are collected by notaries but most are donated to communities and the state. The acquisition costs cover several items: taxes paid to the Treasury, disbursements (sums advanced by notaries on behalf of its clients) and emoluments (remuneration of notaries).
How is purchasing capacity calculated?
The purchasing capacity calculation formula is as follows:
Purchasing capacity = borrowing capacity + personal contribution – notary fees
The bank will also be attentive to your debt ratio, that is to say the ratio between your expenses and your income. The generally tolerated rate is 33%. You can calculate your debt ratio using our simulation tool.
The difference between borrowing capacity and purchasing power is simple. In short,
- Calculating the repayment capacity allows you to know the amount you can borrow;
- Purchasing capacity refers to the maximum amount you can invest in your real estate purchase. It includes borrowing capacity and personal contribution, from which notary fees are deducted.