practical
Can we get a loan to finish our property project in France?
Retired reader has already invested €700,000
Lenders will primarily be interested in your ability to repay the loan
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Reader Question: I am 79 and living in France with a residency card. My wife is Irish and is 74. We are building a house while living in a caravan and have invested around €700,000.
The building contractor withdrew before completion and we are carrying out work ourselves but, as we now only have our pensions, it will take several years. To finish using local contractors would cost around €100,000. Is there a way for us to raise funds against the value of the property so we can make faster progress?
Yes, the most likely solution is to speak to one or more banks about a loan to help complete the work.
The potentially difficult aspects are your ages, the fact that your income is mainly from pensions, and that the property is unfinished and not yet habitable.
Lenders will primarily be interested in your ability to repay the loan and will want to see a credible repayment plan.
However, if the property is already worth substantially more than the amount sought, a lender may be more willing to lend if you are prepared to grant it a legal charge (hypothèque) over the property as security.
A key consideration is whether the property, in its current state, could be professionally valued at an amount significantly higher than the sum you wish to borrow.
If you do proceed in this way, be aware that if you fail to repay the loan, the bank would have the legal right to seek the sale of the property to recover the debt.
Some banks may also consider offering a standard personal loan, although it is less likely this would extend to a sum as high as €100,000.
If the property is close to completion, a loan intended for renovation or improvement works may also be worth discussing.
As you already have a French bank account, your existing bank should be the first port of call, as it already knows your financial situation and may therefore be more flexible than a lender assessing your application from scratch.
However, specialist mortgage or loan brokers may also be worth consulting.
