The purchase of real estate is for the vast majority of French banking operation of a lifetime because in most cases, the future owners will have to resort to the loan to finance this acquisition. However, before embarking on a real estate transaction, borrowers must know their borrowing capacity. This is an indication that a household can direct their real estate research or determine the scale of a construction project. In fact, by knowing the amount of their future housing loan, borrowers can adapt their project to their borrowing capacity. The borrowing capacity is determined according to the debt ratio and the balance of a household. The debt ratio is a ratio between monthly income and recurrent expenses such as monthly loan payments. Before granting a loan, banking institutions shall ensure that this rate does not exceed 33%. For example, a household earning 3000 euros per month will not be able to devote more than 990 euros in monthly credit. The remaining 66% is the rest for living expenses.
The debt ratio determines the borrowing capacity
The borrowing capacity is the sum that can be allocated to a monthly payment without the debt ratio exceeding one-third of the income. By making sure to stay below this amount, the borrowers provide an additional guarantee to the banks. Once the borrowing capacity is known, the latter will make it possible to simulate viable real estate loans. In their search for real estate financing, borrowers are thus more “in the true”. To simulate a loan closer to reality, the borrower or co-borrowers will need to use their previously calculated borrowing capacity. Indeed, by informing this financial effort they will obtain either the borrowed capital or the amount of the monthly repayment. Why choose between knowing the capital that can be borrowed or the amount of the future monthly loan? It depends on the information that potential borrowers are looking for and their thoughts. Will their borrowing capacity be used to determine the maximum amount dedicated to their acquisition project or conversely, will they adjust the duration and the amount of the credit in order to respect their debt ratio?
Simulate an immo or conso loan based on borrowing capacity
The Polutis loan simulator allows both operations to be carried out. To know what capital it is possible to borrow, the user must enter a monthly payment in accordance with its borrowing capacity and a loan period. It should be noted that the longer a loan is in terms of duration, the larger the borrowed capital will be. However, it is important to note that an extension of the term also leads to an increase in the total cost since the borrower will repay interest over a longer period. Parallel calculation is also possible thanks to the monthly payment simulation. In this case, this simulation will be more for a household that already has a budget idea for its real estate acquisition. By providing the necessary capital for the financing and the desired duration, he will obtain the amount of a monthly payment. The adjustment of the duration will make this amount coincide with the borrowing capacity of the household. The credit simulation and the Polutis debt ratio calculator are a duo of essential free tools for all those wishing to subscribe to a real estate or consumer credit.