All the costs of a loan – real estate – personal

Taking a loan is often a must when you want to acquire a house. It is also a very practical solution to equip yourself with a property while controlling your budget. However, care must be taken to properly assess the costs and in particular to take into account the additional costs that may be added.

 

Application fees

Application fees

These administrative costs generally amount to 1% of the amount borrowed. They must be assessed all taxes included because some lending establishments advertise administrative fees excluding taxes. In addition, in certain cases, no administrative fees will be charged to the borrower. Thus for a Zero Plus Rate Loan (universal PTZ), your loan will be exempt from administration fees. In addition, certain lending establishments never take administration fees which however only issues mortgage loans to PEL owners.

 

Dividend costs

Dividend costs

Interim interest is the fee due when there is more than one release of funds within the same loan. For example, you may need 100,000 dollars immediately to buy your house, and then 30,000 dollars in three months to do some work. You therefore request a credit of 130,000 dollars in total, but your credit will not start until the funds are fully released. In the meantime, you will pay additional interest, which is calculated at the rate of the loan granted and which will be added to the initial cost of your loan. This mechanism generally applies in all cases of constructions that have releases by installments according to the calls for funds from builders, promoters or craftsmen…

 

Prepayment penalties

loan payment penalties

In some cases, you may want to repay all or part of your loan before your credit matures. The early repayment indemnities (IRA), also called prepayment penalties (PRA), designate the costs that will be applied in the event of early repayment of a mortgage. Indicated in your contract, these costs are capped by law. They cannot exceed 3% of the principal remaining due before the early repayment, and they must not exceed six months of interest on the sums reimbursed at the average rate established for your loan.

Finally, households which contracted a loan after July 1, 1999 do not pay compensation if the early repayment is consecutive to the sale of the property following a change of the workplace, on the death of one of the two spouses, or else the forced termination of employment of one of them.

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