Equity release is not common in France and over the years some of the French banks have ventured into trying to provide this service but as soon as the market toughened up, the majority were quick to withdraw their offerings.
Why? Well, French banks are very much risk adverse (obviously not in terms of speculation on the worldwide economy though!) when it comes to mortgage lending, and they often consider that if you’re wanting to release equity from your property then you’re having financial problems.
Of course this is a gross generalization but this is how they think most of the time. If you need a loan then you’ve got difficulties unless you’re requiring that loan when you purchase the property in the first place in which case it’s fine.
Therefore, its always advisable to take out the loan when you purchase and save your cash, rather than sink all of your cash into the purchase and then a few years later try and get an equity release.
However, IT IS POSSIBLE for non-French residents to obtain an equity release fairly easily without having to jump through the hoops of proving what every last cent is going to be used for. This equity release is available up to 70% of the property value and used as you wish.
For French residents things are still a bit tricky and most banks will only do equity release if the funds are going to a certain project such as another house purchase or the renovation of the existing property. Full proof of what the funds will be used for must be provided at the time of application and then the funds are released solely upon reception of the invoices.
All equity release mortgages need to be repaid just like a normal mortgage, they are not repayable upon death like in some countries.
To find out more about Equity release mortgages in France please visit French Mortgage Direct