obtaining finance

On 1^st July, 2014 the walls of our wood-framed (ossature bois) house went up; it felt like a real achievement and the start of something new.  It was also the culmination of year’s preparation and hard work where we frequently felt like giving up or banging our heads against the brick wall that is French Banking Bureaucracy…

French banks are much more cautious than British banks about lending money – especially when you go down the self-build route.  You can’t just walk into the bank, waft a few payslips and be told that you will be loaned x amount.

No, you have to provide your employment contracts and 3 months’  payslips or 2-3 years of information if you are self-employed, your tax returns for 2 years; to show your income is stable, passports, marriage certificates and  the “livret de famille” if you have one.  All fairly standard, if detailed,  stuff.  However, where there is a big difference with self-building in the UK is that you have to provide a budget, with quotes to show that you can, in fact afford and finish the house that they are going to help you build.  This is really proactive on their part.  Follow the plan and you will have a house at the end of it.  No more “Grand Designs” projects that run out of money.  I think I gave 50 pages of information to each bank we asked and when we had been accepted the total number of pages was well in excess of 200.

As our bank was not local all of these pages had to be scanned and emailed to them.  A real low and losing the will to live moment was when some of them were rejected as being “too faint”… You just can’t make it up!

It is also very hard to try and think of everything that you are going to need to have for your house, especially if you have never built before.  There is also no going back and asking for more – once the project is set then that is it.  You also have to be very clear as to what is covered in the loan and what isn’t.  At the beginning our kitchen units were covered but not the appliances, but midway during the project the bank about faced and said that none of the kitchen would be accepted…..

We actually have 3 different loans that all have different repayment schedules.  Despite the fact that we had already had a house in France, but had sold it several years ago, we were considered as first time buyers and as such were entitled to help to buy from the Government in an interest free loan.  The amount of this loan is determined by your earning s of 2 fiscal years ago.  For us this was great as it was the year I set up my own business, so our earnings were lower than, for example, the previous year.  This is known as a PTZ (Prêt à taut zero).  However, we have strict guidelines attached to it.  We also have a classic fixed rate loan and a loan that kicks in once the PTZ is paid back so we pay more or less the same amount for the next 25 years L.  Variable rate loans are uncommon in France and the rate is only allowed to vary by a small amount so didn’t seem to make sense. 2014 was also a year where the interest rates were extremely low anyway.

Finally, it took an incredible 6 months to put together our dossier and get it approved… apparently building it is the easy part ;-)