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Real estate loan without application fees:is it possible?

Before deciding on your mortgage application file, your bank will carry out its study. This is a service that requires time and rigour. It is following this study that it will be able to offer you an offer that corresponds to your project.

When we talk about service, however, we also talk about remuneration and for the processing of your file, the bank will ask you to pay a fee. Varying from one bank to another, these fees are between 500 and 1,500 euros. To reduce the costs, it is possible to negotiate to remove the administrative fees.

Application fees for a home loan:what are we talking about?

As part of a mortgage application, banks will ask you to pay application fees corresponding to their remuneration for the analysis and processing of your application. Indeed, the analysis of a file is not an easy task. In particular, the bank must spend a lot of time studying the various documents in the file that you will have provided. It will ensure that the supporting documents are consistent with each other. To be remunerated for his work, the establishment will require you to pay between 500 and 1,500 euros.

The administration fees are taken into account in your annual percentage rate or APR which will represent the total cost of your financing. This rate will be provided to you by the bank when you sign your contract. It consists of application fees, insurance, brokerage fees, warranty fees and many others. As part of your home loan offer, the application fees are negotiable.

Why do we have to pay application fees?

Administrative fees are considered a source of short-term income by the bank. Any borrower must pay these fees in order to remunerate the work that the bank will have spent analyzing the mortgage application file. Each establishment has its own policy in this regard. While some charge these fees, regardless of the outcome of the credit application, most credit agencies will not charge you a fee in the event of a refusal. The sum is often requested by the bank at the finalization of the loan, when the funds are released. The payment will then take place during the reimbursement of the first monthly payment, but you can completely pay the sum directly with your personal contribution if it suits you.

How to negotiate the abolition of your application fees?

The administration fees applied by your bank will be mentioned in the banks' tariff guides. You must therefore consult this document to know the amount that will be required. At between 500 and 1,500 euros, the amount to be paid does not represent a very large part of the total cost of financing. So you won't have too much difficulty negotiating it. The best way to do this is to put banks in competition, so as to have convincing arguments. Do not hesitate to contact several banks to find better loan conditions.

When some see that you are likely to go to the competition rather than to her, the banks will be able to grant you the elimination of your application fees. In addition, the cost of your application fees will depend on the simplicity of your file. Institutions are likely to offer you higher or lower fees. In order to put the odds on your side, build a concrete file. Produce all the documents you deem necessary to make the analysis easier.