Three options to buy and renovate

I am considering purchasing a property in France with a view to renovating it. I have the money to buy the property and complete the work, but I would also like to understand what the French mortgage options are? A B.

THE IDEA of renovating your French property is very popular with those who have a little time and are looking to purchase and increase the value of their second home.

First, financing this type of project using a French mortgage is perfectly feasible. There are, however, a few important rules and regulations to be aware of. Here are the three options available to you:

- Using a purchase and renovation mortgage to finance the purchase of the property and renovation works.

- Using a mortgage to purchase the property and then paying for renovation works yourself. This is only possible if the property is in a habitable state when purchased.

- Buying the property and paying for the renovations in cash and then arranging an equity release French mortgage at a later stage.

If you are looking to finance the renovation works using a French mortgage, all of the work needs to be carried out by French-registered builders. This will ensure that the work will be completed to a certain standard.

The other benefit is that these contractors will be obliged to have comprehensive insurance to cover their work. If you would prefer to carry out the work yourselves, then the second of the three options may be more suitable.

When applying for a purchase and renovation mortgage (or renovation mortgage on its own), you will need to submit quotes from the contractors who will be carrying out the work. Once the mortgage is approved, the funds will then be released directly to the builder by the French lender as and when the work is carried out.

If you choose the third option, an equity release mortgage will allow you to secure a mortgage against the property after work that has been carried out and will be based on the new value of the property. Rates are slightly higher but this provides more flexibility.

Jo Cowling, of mortgage brokers International Private Finance (www. internationalprivatefinance.com) answers your mortgage questions. Please email your queries to mortgage@connexionfrance.com