How to build a damping board?

At certain stages of his life, man needs to make some investments. This is the case of the birth of a newborn. Indeed, such an event normally requires the purchase of real estate if you do not have one in order to guarantee a stable environment for the infant. However, before taking out a loan, it is essential to know in advance the terms of repayment . This is why this article offers you to go to the discovery of the process of building a depreciation board.

The importance of the depreciation table

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In truth, the depreciation chart is a plan to repay your credit. Moreover, some do not hesitate to call it under this term. Others prefer to use the term schedule instead, as it provides an accurate understanding of the share that was repaid on a specific date. Thus, it gives you the opportunity to find the total cost of the credit and the remaining capital to be repaid to finish solving the loan. This is an accounting and financial schedule that is delivered by the lending organization to the borrower at the time of the loan offer. In particular, it allows the future borrower to have visibility on the characteristics of the credit he is about to contract.

In all depreciation tablepresentations, there are some topics that you will always find. You will find some standard features such as maturity number, repaid or principal capital, interest, insurance costs, outstanding amount and monthly repayment payment. This document describes in monthly order and throughout the borrowing period the state of development of the loan to be contracted .

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Once the document is in your possession, you can review it before making the decision whether or not to accept the loan offer. On a fixed rate loan with a constant monthly payment, the debtor will gradually repay the money loaned to him. Thus, as the months pass, the debtor will owe a little less money to his organization borrower.

Usually, the depreciation table provided by the borrowing agency highlighting the loan offer is temporary. Indeed, when it comes to a real estate credit, the date of the first maturity is not constantly known with accuracy. But as soon as the date is known, the bank will then send you a definitive schedule. It should also be noted that when you accumulate several real estate credits, you will have two different depreciation tables. It will be necessary to ensure that your banking agency offers you a unique depreciation chart that takes into account the characteristics of all these loans. In summary, the depreciation table is a comparison tool that allows you to:

  • Compare loan offers from several banks;
  • Plan for upcoming loan deadlines;
  • Have a clear idea of the share of capital repaid or outstanding;
  • Whether it is worthwhile to make a prepayment;
  • Study several solutions to maximize the total amount of your real estate credit (renegotiation of your real estate credit, the request for a repurchase of credit…).

Essential elements contained in a depreciation table

The schedule is always presented in the form of a table that contains all the information related to your loan. It is a tool that helps you to seamlessly track the evolution of your credit creditworthiness up to its total repayment. According to the regulatory obligations of the European Standardized Information Sheet (FISE ), each loan amortization document must contain:

Date or number of deadlines

It is informed about the number of deadlines for the payment of the real estate loan. That is to say, this is the column to look at to know the periodicity of the reimbursement (monthly or annual).

The amount of maturity

This is the portion of capital to be paid off periodically at each maturity.

The amount (rate) of interest

Any loan entered into gives rise to the payment of interest on the total amount granted. It refers to the debt of interest received at each maturity by the borrowing organization in respect of remuneration of the loan capital.

The amount of capital repaid on this maturity

It corresponds to the amount of the share of amortized capital, interest and insurance costs to be paid at each maturity.

Insurance costs

They are usually calculated on the basis of the total amount borrowed. This is then an amount that remains stable throughout the period of Refund. Even if you have the option to take out insurance from the borrowing organization, you can also purchase your insurance from another insurance company. By comparing the different offers and playing on the competition, you can achieve significant savings .

Capital remaining due

The amount remaining to be amortized on the remaining successive maturity shall be the remaining capital due . To put it otherwise, this is the amount of the loan remaining to be repaid after solving each monthly payment.

All of these items or characteristics in the depreciation table correspond to columns. The number of lines depends on deadlines. However, it should be noted that one subtotal line is added for each year and another additional row at the end of the table to better highlight the total amount of the credit.

The different types of depreciation

There are a total of three types of amortization of a loan. We distinguish:

  • “ In fine” amortization , which consists in solving all of the capital at the end of the loan. The debtor pays only interest and insurance premium during the credit period.
  • Progressive amortization has the peculiarity of presenting maturities in which the share of capital to be repaid increases while that of interest decreases.
  • Constant amortization highlights a constant share of capital throughout the loan and a gradual decrease in interest.

The most important thing to remember is that you have to keep the damping board in a safe place for possible uses. Apart from the regular use of the depreciation table to know the evolution of your refunds, it can be used in fact:

  • To justify the monthly payments you reimburse per month as part of a request for a buyback file.
  • In connection with an underwriting of a credit with another credit agency . This organization will ask for this in order to have proof of an ongoing credit and to be able to review it in detail. This will serve as a basis for setting the debt rate, taking into account what you have to pay off your first credit and the remainder of the credit term.

Online, you have the opportunity to find some copies of depreciation chart. But you can also use Excel software to build a damping table.

Calculate your borrowing capacity

You can not consider a real estate loan without a minimum of research. So it is better to know your debt rate, but also this budget envelope that will allow you to buy the housing of your dreams. On the site you will have all the necessary information so that the calculation is not laborious.

  • You need to take into account the salaries of your household, if you borrow alone, the capacity will necessarily be lower.
  • Do not forget to inform your possible debts, current loans in progress, your expenses…
  • You can then calculate your borrowing capacity based on the monthly instalments you are able to pay or your overall budget for that purchase.
  • If you can’t find a bank or organization that suits your expectations, a broker can be very effective.

This professional uses your profile and looks for transactions that may match you so that the borrowing capacity is as high as possible. This is considered when the rate is very low, hence the interest of comparing those charged by banks and financial institutions. With this data, you can then respond positively to your request or review your project.