I've read that around 40% of French mortgages are Pret Relais (bridging loans) in order to purchase another home and renovate it before having sold the existing family home (thus avoiding renting whilst renovation takes place).
Has anyone used a Pret Relais to fund renovation of another house before selling their current place? If so - who did you use? how did you go about getting it? Was it based on your income or just as a % of equity of your home? - we already have a mortgage on the purchase of the house we intend to renovate so would be over the 1/3 income as debt repayment. Can you roll up the interest to the end?
Would you recommend it?
All experiences of interest - as we're currently considering this as an option whilst our house is on the market so we can minimise the period of renting once our current family home is sold.
I think that's the idea. We had a fixed rate, so they could work it out there and then and say what payments and total were. I think we paid slightly more the first month to make up the rag-tag bits and then it was the same each month. We got a letter of confirmation just after the year had ended and done was done. I think the majority of these loans are short term anyway, but that appears to be the way they all work.
We had a one year prêt relais from (errrr, hmmm) Barclays France when we arrived. We had enough money but wanted to keep our own aside and get the higher rate of interest to grow it. So, the prêt relais paid for the floor replacement and roof relaying we needed. Payments were fixed and the same each month, the loan agreed and we knew what we had to repay and that was that. I would advise against for people who might not be able to afford to repay and are speculating on having enough income every month to pay it off because it looked like the penalties are stiff. We paid it off, so don't know about that thankfully.