The nice weather is here, and with it comes the desire to renovate and do some work on your house. Take advantage of it to bring more comfort to your whole family. Why not install a veranda in your garden or transform your garden? Discover the ideal solution with the renovation loan and how to finance the work.
Doing some work, arranging your attic to add a quieter living space in your house. Changing the frames or installing double glazing to save on your heating oil bill…
Who can get a renovation loan?
Only homeowners can get a renovation loan. A tenant cannot take out a loan under the preferential conditions of the renovation loan. They will need to take out a personal loan or a classic installment loan.
What are the conditions for getting a renovation loan?
- Be the owner of the house;
- Provide a signed quote from both parties (the contractor and the owner);
- If no quote is available, provide the invoice for the work;
- The quote must cover at least 80% of the amount borrowed;
- Identity card;
- Last three pay slips;
- Bank statements where the salary is deposited;
- Property title of the house;
- Loan in both names for married people.
Is there a maximum borrowing limit?
No, it will all depend on your contributive capacity.
Installment Loan or Mortgage Loan?
In terms of renovation loans, this is an important question often asked: which is the most interesting formula: the installment loan or the mortgage loan?
Generally, the installment loan will be the winning formula. Indeed, the mortgage loan involves costs, and even if the rates are lower in a mortgage loan (3.5%), the costs incurred by the mortgage loan will negate this advantage. The rates in installment loans are around 7%, so it is only if you plan to borrow a very large amount (more than €50,000) that the mortgage loan becomes interesting.
The mortgage loan will be the solution for the borrower who cannot offer other sufficient guarantees (for example, if the salary amount is too low or if there are already other ongoing loans).
Are the costs of a mortgage loan significant?
When buying your house, the financial institution will establish a mortgage guarantee. This guarantee will incur four types of costs: loan deed fees, notary fees, registration tax to the registration administration, and VAT.
When your initial mortgage is already well repaid, you can again take out a mortgage loan to carry out the work. In this case, the costs will be lower. They will only include two types of costs: loan deed fees and notary fees.
Therefore, to know exactly which of the two formulas is the most interesting for you, you will need to ask one of our brokers to analyze your file. Let’s say that below €25,000 and unless you have no other solution, you should favor the installment loan.
And don’t forget…
Finally, with the pace at which raw materials are running out and considering the frantic increase in energy prices.
Doing insulation work, for example, means reducing your energy bills. The same goes when you buy a refrigerator or a dishwasher from the higher range, which will consume much less electricity. In the long run, you will win and contribute to the ecological effort. With Cpe you benefit from advantageous rates, apply for your loan online.
