Prêt Viager Hypothécaire - Has anyone any Advice?

Banking & Financial
1

I want to raise some cash and have read about a scheme called Prêt Viager Hypothécaire which seems to fit the bill and is akin to the Equity Release schemes available in UK. It seems to be only available through Credit Foncier.


Does anyone have any experience with this scheme? If so can you let me know:


a. What rates of interest are they charging?


b. What "hoops" they put you through to obtain the loan?


c. Anything else one needs to be wary of.



Thanks


Ian




2

Thanks Martin - The Interest Rate does seem high but I can remember paying 15% (which really hurt!)

3

Thank you Veronica - I only wish I could offer some constructive advice.

4

I was most interested to read your comment on Credit Foncier. I am in a dreadful position, my husband and I having taken a pret viager with CF in 2010 in order to help finance renovations and provide me with a downstairs bedroom as I suffer with Multiple Sclerosis. My husband contracted pancreatic cancer the following year and died in 2011 leaving me in a very large house which I seem unable to sell due to the current market. It is a house I can ill afford to stay in as I cannot afford the maintenance. Meanwhile, as you say CF's horrendous interest rate is rising and if I don't sell soon I will be stuck here in this house for the rest of my life and it will fall down around my ears. I would NEVER suggest anyone goes near Credit Foncier. It was the worst deal we have ever done. Any advice you can be provide me with, or anyone else who can suggest what I can do would be very welcome. I am at my wits end trying to find a solution to which there seems to be no answer.

Veronica

5

Hi Ian,

I'm also a mortgage broker (just for transparency!). I last looked at CF's rates in July 2012 and they were horrendous : 7.95% fixed rate with a 3% dossier fee. Whilst the prêt viager can be a good solution to allow people to remain in their home & have cash to spend, it is a very expensive way to get money unfortunately. I've never gone through to completion on such a loan.

As Sharon said, you first have to be over 65, then you can release an increasing percentage of the property value as you get older. The bank will value your property.

Interest accrues on the amount borrowed and on your death your heirs have up to 6 months to pay down the outstanding balance or sell the property. On the positive side - no monthly repayments for you when the cash is released.

Hope this helps,

Martin

6

Thanks Ross - Most Interesting

7

Thanks Sharon

8

Hi Ian

It's only available to those over 65 and the amount you can borrow depends on the value of your property (determined by the lenders valuation).

I hope to have answered your initial questions.

I'm a French mortgage broker, so if you want more details please contact me on sharon@frenchmortgagedirect.com

9

Ian, just found this as I am hoping to do something similar in future.

http://www.sykesanderson.com/Service_France/articles/french_equity_release.asp

Ross