If you want to undertake renovation work in your home and you do not have the necessary funds, you will have to resort to a work loan. The works loan is in principle a consumer loan granted to finance a renovation, an extension or the installation of new equipment in the house. However, to a certain extent, it is also possible to obtain a mortgage for works. Explanations.
The work loan is a financing that you can contract with a bank or a credit institution to finance your work on the habitat. In general, it is a consumer credit allocated to the completion of the work. Its amount is between 200 and 75,000 euros and the repayment period is up to 84 months. As a consumer loan, the work loan is relatively easy to obtain. Indeed, as the amount granted and the repayment period are less substantial, the risks of non-repayment are reduced.
Moreover, the works loan is an assigned loan, which means that it is attached to the realization of its object. This implies that when the borrower makes his request to the bank, he must provide proof of use of the funds, which is all the more reassuring for the bank. The advantage with a work credit is that when the work is not done, the credit is automatically canceled. No money will be paid to you and you will not be liable for any refund.
If in principle, the work loan is the best credit to finance a renovation, there is a case where the use of mortgage is imperative. This is particularly the case during major works whose amount exceeds 75,000 euros. As it is impossible to obtain a consumer loan of more than 75,000 euros, it is to the mortgage that the owners turn. However, to obtain such funding, certain conditions must be met. First of all, it is necessary to meet the classic requirements of banks in terms of mortgage loans. You must therefore have excellent financial health, a borrowing capacity up to the amount requested and pay a personal contribution of at least 10%. The mortgage has the advantage of offering a low interest rate compared to consumer credit.
In addition, the repayment period can be established over a period of 10 to 30 years. It should be noted, however, that this type of financing must be accompanied by a subscription to death and disability insurance. Moreover, it is necessary to guarantee the loan by a mortgage or through a surety company. Apart from the classic conditions of the mortgage, to finance its work with such a loan, it is necessary to entrust the work to building professionals. Among the documents required by the bank, we will find the estimate of the professional.
Obtaining the best mortgage for work depends on how you build your file and your borrower profile. If you think you meet all the conditions to apply for a loan, you will be in the best position to obtain an advantageous rate. However, in order to be sure to benefit from the best offer, it is necessary to go through an online credit comparator. This tool will give you access to a large number of proposals allowing you to make a comparison. Otherwise, you can also call on a mortgage broker whose job is to find the best contract for his client by using his network and his knowledge of the market.
