Become an owner by earning the minimum wage? It's possible ! Provided you do not go into debt and do not buy real estate, house or apartment, in big cities like Paris, Lyon or Bordeaux.
A study published in early January 2018 shows that the purchasing power of workers earning the minimum wage has increased since 2010. By taking out a loan over 25 years and with a monthly payment of 33%, a smicard can, for example, afford a 43 square meters in Grenoble.
With a salary equivalent to the minimum wage, or around 1,100 euros of net monthly income, it may seem difficult to borrow to finance the acquisition of housing. However, you should know that the level of income is not the only element taken into account by the bank for the granting of the loan. Indeed, any credits in progress and the rest to live are also decisive. In addition, the lender will require a substantial personal contribution corresponding to at least 10% of the acquisition price excluding notary and guarantee fees.
Your professional situation and in particular its stability and the possibilities of career development, as well as the maintenance of your bank accounts will be scrutinized. If you have an overdraft authorization but each month your balance does not exceed the ceiling, the bank will consider that you have respected your commitment and will be more willing to grant you a mortgage.
The particularly high prices charged in certain large cities such as Paris often dissuade people with minimum wage from buying property there and banks from granting them a loan. Fortunately, devices like the Zero Rate Loan (PTZ) can still support those who wish to become homeowners with low incomes. As a reminder, the PTZ is a free loan that helps households buy their first main residence. This aid can finance up to 40% of the borrower's real estate project. Other solutions exist, including the Action Logement loan and the Housing Savings Plan.
To put the odds on your side or if you do not have a real estate contribution, the best solution is to provide guarantees to your banker. Three main guarantees are possible:the mortgage, the deposit and the housing loan (see here for other financial advice). All are intended to compensate for the potential default of the borrower. If you opt for the mortgage, the bank will be entitled to sell the mortgaged property at judicial auction if you are unable to repay it. Unlike the mortgage, the deposit is a personal guarantee since it is assumed by a natural or legal person who will have to take charge of the reimbursement of all or part of the remaining monthly payments if the borrower is no longer able to do. Housing credit can also be considered. This is a financial company that stands surety for the benefit of the subscriber in the context of a mortgage. The latter undertakes with the lending bank to pay in place of the borrower in the event of default by the latter. This guarantee can be used to cover other types of loans such as the bridging loan, the home savings loan, the approved loans or the zero-rate loan.
Since 2010, the purchasing power of minimum wage earners has increased slightly, allowing them to become homeowners more easily. On the other hand, these people struggle to afford sufficient space in large cities. If you have a low income, it is therefore preferable to look for accommodation in small and medium-sized towns.
