Equity release in France is becoming increasingly difficult to obtain and is only possible if you meet several stringent conditions. As with all French loans, you will need to have a low debt ratio and good credit history. In addition the new loan should not take you over the 33% debt ratio mark. The maximum loan to value possible is 70% for an equity release.
The key point to bear in mind, and that which disqualifies a large number of applicants is that the bank require a reason for the equity release and this must match a short list held by the bank . For example, you can not release cash from your house to do with what you wish or for use in your business . Acceptable reasons for the banks are such things as to pay education costs or to purchase a different house in the UK. The exhaustive list can be discussed with us
As a general rule, it is possible to release up to 70% of the net value of your French Property – i.e. the total value less any existing French Mortgage on the property. Meaning, that if you have a property which is valued at €500,000 with an existing French Mortgage of €200,000 you would in theory be able to release up to €210,000 – dependent on meeting with various French bank requirements. An independent evaluator will be hired by the bank to give an evaluation of the French Property.
With regards to qualifying for the equity release the bank will apply the same rules as for obtaining a standard initial French Mortgage. You will need to prove that your outgoing obligations, including the new French Mortgage, do not amount to more than 33% of your earnings. French Mortgage Xpress will ask you to complete our ‘pre-qualification form’ prior to asking for all of the requisite documentation. This will give us some information on you and enable us to ascertain which bank will best suit your needs, but also to check existing debt levels to ensure that a French Mortgage is possible. This will save both you and the French bank time and effort.
It is far easier to obtain an equity release French Mortgage if you are employed rather than self-employed.
For an employed individual the bank will not necessarily ask for the purpose of the equity release through the French Mortgage, whereas for a self employed individual the funds must be destined to pay off an existing loan (i.e. perhaps a loan taken out in the UK to purchase the property in the first place) or be destined to purchase an new property in London or the UK. All supporting documentation in relation to a new house purchase or an existing loan will have to be provided to the French Bank.
Anyone looking into obtaining an equity release through a new French Mortgage should be aware that upon your French Mortgage being granted you will be required to visit your notary (this will be the notary stipulated on the deeds to the property) in order to obtain the funds. As was the case with the initial purchase of the property this visit will incur a charge, as the notary needs to register the new French Mortgage with the land registry. The amount of this charge will be conveyed to you by your notary.
Any additional owners or people with an interest in the property as listed on the deeds of the property will need to be aware of the new French Mortgage, even though it will not affect their ‘portion’ of the property and will act as a caution hypotecaire. They will need to sign the French Mortgage offer where indicated and they will also be required to present themselves before the notary for signature before the funds will be released.
Clearly in a scenario such as this, only 70% of the proportion of the value of the property relating to the individual wishing to borrow is available for equity release through the French Mortgage.
If you are interested in equity release through a new French Mortgage, complete the French Mortgage Xpress Quotation Form. We’ll respond to you within 1 working day! Or, simply call us now on +33(0)4. 92.98.80.70
