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French finance - 21 April 2009

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I currently own a property in France valued at €200,000 in the current market. I have no mortgage or other loan.

I want to release equity of about £25,000 and am struggling to find a loan. I am self employed and with a lowish income but I have a guarantor for any mortgage/loan with substantial assets in the UK.

Any advice on where to go?


Comments

1. Paul Collins - April 21, 2009

You seem to have come up against the biggest current problem for overseas property buyers - finance. With the banks in such trouble with their own balance sheets, many have resorted to lending only to what they might refer to as 'super-prime' customers. In many cases this means that the only people able to get a loan are the ones who do not need one!

In some ways, the fact that you don't have any other mortgages or loans against your name can count against you - those with no credit history sometimes are less able to get credit than those with a bad credit history.

You don't mention what the loan is for, which may also have a bearing on its suitablility for banks in the current climate.

Add to this the fact that all banks are more relucant to lend at the moment, and the position is even less-easy to navigate.

You also don't mention if you have tried both the UK and France in order to release equity. Although it may make little difference, you might find that if the money is staying in France in order to renovate or extend your property, it opens the channels for the French banks to help you.

Make sure you take independent legal and financial advice throughout this process. A specialist IFA who deals with overseas mortgages will have knowledge of financial products that other banks and mortgage lenders may not use, and so could be your best route to getting the cash you require.

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