What is a bank? What are his activities? How does a real estate mortgage fit in a bank and why borrow in such an organization?
What is the role of a bank?
The bank is primarily an intermediary between savers and borrowers.
It offers various daily operations such as the management of means of payment, the granting of credit, the management of savings and the advice. It also plays an important role in the financial markets. It also sells products and services such as telephones, alarms, insurance, provident insurance and many more.
The bank pays interest to people who trust their savings and pays interest to those who borrow money.
The mortgage is at the heart of the banking business because it helps to capture customers and retain them. Falling rates in recent years have increased borrower mobility as well as competition among banks.
The activity of real estate credit in a bank
To lend you money to make your real estate purchase, the bank must borrow it on the financial markets, especially from the European Central Bank. It will pay an interest rate based on various macro and microenvironmental factors as well as on the economic situation (inflation, exchange rate, etc …). This is called the rate.
Read also What are the costs of subscribing to a mortgage?
Once the money is in her possession, she can lend it to her clients for a margin. This margin covers the fixed costs, but also the risks related to the loan. The bank is a company that, like all the others, wants to generate a turnover in the annual report!
Subscribe to a mortgage in a bank
Most real estate loans are in a banking network. With its experience, the bank is the safest place to borrow.
You will also be accompanied by your bank advisor, who knows your situation and your needs. French banks are today highly rated in terms of financial strength. Since the 2008 crisis, they have largely increased their own funds.
The bank can also offer you directly the sale of real estate, most networks having their own real estate sales company.
You benefit from a turnkey project adapted to your needs, whether it is a main or rental home.
Using a bank can also have disadvantages. Unlike brokers, the bank will have only one rate grid and its margin will be limited in trading. The domiciliation of bank accounts may also be required, forcing you to change your current account bank.
The bank today fulfills a multitude of functions, with for first interest the satisfaction of the customer while accompanying it in its projects of life.