The personal contribution is the part of availability that the borrower has and that he will use for his real estate project.
It consists of the following elements:
- Savings earned on all banking contracts ( ELP , life insurance …)
- Business Savings Plan (which the borrower can benefit on a net basis due to the reason for the withdrawal )
- Family gifts
- Family loans (with or without interest …)
- added value on the resale of a previous home
- Money available on a current account.
- A personal contribution is prepared by constituting very early.
- Banks lend more willingly to risk management when there is a good personal contribution since the loan effort is reduced and therefore there is a shared risk on the investment. Banks will then benefit from a rate lower than the customer with contribution.
- It is considered that, on average, a minimum contribution of 30% considerably reduces the borrowing rate.