Find out how to finance a home loan by including a work envelope without having contributed.
Home loan and works, without contribution
The contribution has become over the years an essential condition for obtaining a mortgage, especially when the borrower wishes to obtain advantageous conditions in terms of rate, duration and monthly payment. Simply, not everyone has a savings or personal contribution to add to the financing, some borrowers do not wish to use it either and this should not be a predominant criterion in obtaining financing. There are indeed financial organizations that agree to finance the project without contribution. Banks, credit institutions and credit organizations offer home loan offers based on other positive points of the borrower such as direct debit, sustainability of income or the bank profile (no overdraft, of arrears and rejections).
The operation is not infeasible since establishments agree to offer households offers of mortgage without contribution. It is enough to determine the total envelope of the works as well as their nature (insulation, structural work, decoration, etc.), the lender can thus slip them into the reserved works, which can be taken apart in the financing study credit. On the household side, you must remain confident about the feasibility of your project and not give up on the first refusal, it is quite common when applying for a mortgage with no personal or professional contribution.
What solutions to finance the work envelope with the mortgage?
There are several cases that arise and for each a suitable solution:
Include the work envelope in the mortgage
For households who are at the stage of looking for a mortgage, it is first necessary to submit a housing loan application and specify the amount of the desired work envelope. The interest is to take advantage of the low rate of the mortgage to finance its works at lower cost and by including the sum in the financing, the borrower benefits from a single withdrawal from his bank account rather than several. It is important to know that the work must necessarily be linked to the property to be purchased (house, apartment, construction).
Take out a work loan after the mortgage
For households that have not had the time or have not thought of financing the work when they took out a mortgage, the solution that arises is to use a work loan or a personal loan. The difference is that the work loan must be supported by documents such as quotes or purchase orders. The personal loan can be defined as an envelope from which the household will draw as the work progresses, this is often the option chosen by the owners doing the work themselves or part of the work in the house.
Redeem the mortgage and finance the work envelope
For households unable to accumulate a new debt, there is the solution of the repurchase of credit. It is quite simply an operation which makes it possible to redeem one’s mortgage and any other credits in order to then include the amount of the work in the total sum. The old credits are reimbursed by the bank which buys back and it sets up a new credit contract including a longer duration, a fixed rate and a reduced monthly payment or similar to the old one. Thus, the household can do its work and continue to reimburse a similar monthly payment.