Credit to Finance the Work of the House
February 1, 2019
What kind of credit?
The nature and amount of work are the elements that will determine how you organize their funding.
- Is the amount less than € 75,000? You must opt for a consumer loan.
- The work of your house exceeds 75 000 €? it will then be a real estate credit.
- Is this work related to energy savings? If yes, can you benefit from accession aid?
Works of less than 75 000 €
If the amount does not exceed 75 000 € (21 500 € before 1 May 2011) and if the duration is greater than 3 months, which will certainly be the case, you can finance the work of your house with a personal loan and thus benefit from the regulation of consumer credit, in particular the Scrivenner Laws 1 and 2 and the Lagarde Law.
The Scrivenner Act requires the bank to provide the borrower with a prior offer in which all elements of the financing will be included. It is valid for fifteen days. Once the document is signed, you have another fourteen days to retract.
This will prevent you from paying the warranty fee. You will not be asked for a mortgage or deposit type credit housing and you will benefit from reduced fees.
Works greater than 75 000 €
If the work of your house exceeds 75 000 €, you will have to opt for a mortgage. You will benefit from the protection of borrowers on this type of loan: issuing a prior offer valid for 30 days and a cooling off period of 10 days.
Unlike a consumer loan, a home loan requires either a mortgage guarantee or the establishment of a mutual guarantee. The file fees are also generally more important.
However, it may be interesting to obtain a mortgage to finance the work of his house.
First, the interest rate will be lower and you can opt for a longer repayment period, credit up to 35 years or more.
Also think about the mortgage, it can very well match your needs. The mortgage life loan, in particular is particularly suitable for retirees who will have nothing to settle during the term of the loan, the borrowed capital and interest being repaid at term.
Aid to finance the work of the house
When the work improves the energy performance of the dwelling, the public authorities offer the borrowers various aids for accession.
Eco-loan at zero rate
The eco-loan at zero rate was decided after the Grenelle Environment Forum to fight against the greenhouse effect due to the emission of gas.
You can benefit for work on a main residence built before 1990.
To benefit from the eco-loan at zero rates, you must realize either a “work package” included in six categories defined by decree or improve the energy performance of the house.
List of works included in the bouquet
- Roof insulation
- Wall insulation
- Exterior windows change
- Changing the heating or hot water production with a condensing boiler
- Installing a heater that uses renewable energy
- Installation of hot water production using renewable energy
Housing savings loan
If you have taken out a home savings transaction, consider questioning your banker. Depending on when you opened the transaction, the rate conditions may be advantageous.
Beware: The home savings account savings plan and the home savings plan are two different operations that do not allow you to obtain a different credit rate to finance the work of your home.