Restore real estate purchasing power to the French. This is the objective of the Minister of Ecological Transition Christophe Béchu, who announced this Monday in Le Parisien a series of “simplification measures for housing”. The government plans in particular to create two new types of credit “ultimate” and “mortgage” in order to allow buyers to finance their properties more easily. But how do these new loan formulas work? Here are some answers.
Let’s start with the first system proposed by Christophe Béchu, namely the “ultimate loan”. This type of loan already exists in France but it is generally reserved for investors or households who have significant financial assets. “The bullet loan allows a buyer to repay only the interest on the loan during the term of the loan, then the capital in one go at the last due date.», explains Cécile Roquelaure, director of studies at Empruntis. The main interest for the buyer is to lower his monthly payments and allow him to have the possibility of reselling his property to repay the capital. In return, the rates offered by banks for final loans are higher than those for traditional loans. The bank can also require the buyer to provide financial guarantees, for example by asking them to take out a life insurance contract.
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Divide the borrowing burden into two parts
The Minister for Ecological Transition also raised the possibility of launching a “mortgage loan”. “This type of loan is widespread in Anglo-Saxon countriescontinues Cécile Roquelaure. Reserved for households that already own property, it consists of mortgaging one or more existing properties to guarantee the new credit.» Concretely, the bank lends the buyer a sum of money representing 70% to 80% of the amount of the new property they wish to acquire, to be repaid like a traditional loan. The buyer repays the remaining 20% to 30% at the end of the credit. In the event of default by the buyer, the bank has the possibility of reselling the property in order to settle the loan. “The idea is to distribute the borrowing burden in two stages, in order to give the household time to find financing capacity,” explains Cécile Roquelaure.
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Christophe Béchu is expected to meet players in the banking sector at the end of February to discuss the possible launch of these new loans. It remains to be seen whether banks are ready to play the game and offer these new loans to their customers.
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2024-02-12 14:22:27
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