You are currently renting, yet you dream of becoming a homeowner... but you have little or no savings.
Good news! Buying a property with no money is possible.
Banks have set up a number of schemes to help future buyers invest in property, even if you don't have the recommended 20% or 30% personal contribution.
We explain in this article how to obtain a loan without contribution and reassure the banker regarding your ability to repay.
This tip for getting a property loan or a mortgage with no personal contribution may seem obvious.
In order to increase your chances of becoming a homeowner with no personal contribution, you need to manage your bank accounts carefully.
Buyers who do not have sufficient savings are at a distinct disadvantage. In the current economic situation, banks are increasingly reluctant to grant home loans. In this context, showing that you are in control of your budget is a positive argument for your file.
You should also avoid having other outstanding loans, bearing in mind that the current debt ratio is 20%. The more debts you have, the less easy it will be to get an agreement from the bank.
This is a criterion that will weigh heavily to avoid being refused by banks.
From keeping up with your bill payments to your ability to bring in a regular income, everything will be scrutinised to measure your financial situation and determine your borrowing profile.
In addition to reducing your monthly loan payments, a personal contribution is a good signal to the banks of your commitment to your future property project.
The repayment period for a loan or a mortgage can be up to 30 years. Applying for a loan without personal contribution will undeniably increase the amount you will have to pay each month.
A financial effort, even for modest incomes, helps to reassure the banks, but not only. It is also a way for potential buyers to avoid being burdened with large payments that could upset the household budget.
Investing in property without personal contribution is a real struggle.
Finding a bank willing to go along with you will not be easy, but that does not mean that the quest is impossible.
First thing to do, make an appointment at your current bank. This, for several reasons: they already know you and you may have savings accounts.
If you are refused, you have two options:
- Approach other banks
- Use a real estate broker
Buying a property in Luxembourg without personal contribution should be done with the utmost care. With a high price per square metre (around 9,200 euros), buying a flat or a house in the heart of the Grand Duchy represents a certain cost.
It is important to calculate your borrowing capacity and monthly expenses to obtain an accurate estimate of the amount needed. Negotiating the price of the property for sale in Luxembourg could also count for a lot if you want to get the house of your dreams without having to invest any start-up capital.
As you already understood, investing in property without personal contribution is not easy.
It is strongly recommended that you prepare your purchase in advance by saving up several months before submitting your application to the bank. This will allow you to better negotiate the loan rate, but also, and especially, to reduce the repayment period.
A real estate broker can help you with your loan application and make it easier to become a homeowner.