The scenario comes up more and more frequently. A wealthy owner, sometimes a multiple owner, sees his credit request refused by his network bank, without a satisfactory explanation. According to the exclusive barometer from the Bougardier firm40% of its clients have more than 1 million euros in assets, 72% are multi-owners, and yet 80% of their funding requests are rejected. The lock extends to SCI projects (80% refusal) and work files (83%).
Typical case. A customer of 68 years old, holder of more than 2 million euros of real estate assetsrefused by three banks for a project that is nevertheless secure. For Véronique Bougardierdirector of the eponymous firm and specialist in mortgage loan for more than 50 years, the explanation can be summed up in one sentence. “In France, we do not lend against a guarantee. We lend on an ability to repay.” Before looking for a solution, understanding why your file was refused is the first step.
Understand why your bank refused
First reason for refusal, French banking logic is entirely based on your monthly repayment capacitymeasured by the debt ratio and the stability of your income. Your assets constitute, at best, an element of comfort. Worse, significant real estate assets can become a hindrance. “The real estate guarantee in France, the recovery, the forced sale, are very complicated for a banker”explains Véronique Bougardier. If you had 1 million euros invested in life insurance, your bank would easily accept a patrimonial advance. On real estate, the recovery is too long for her to take the risk.
Second reason, your project is off the beaten track. Do you want to buy your future primary residence while keeping your current one? Pay inheritance tax without selling inherited property? Make a current account contribution to your company? Finance major work without touching your savings? Network banks simply do not have a product tailored to these demands. “Resume one mortgage on a property that you already have for cash, this is not the business of traditional French banks”decides the specialist.
Third reason, particularly tricky, borrower insurance. As soon as you exceed 60 to 65 years old or you have a health problem, the additional premium raises the APR above the legal usury rate, and the bank refuses, even with a solid financial record. The ax falls as certain mortgage credit contracts run until 90 or 95 years old depending on the establishment. If you are a 65-year-old owner with significant assets, you are statistically a target for refusals.
Activate mortgage credit, instructions for use
The solution is called mortgage loan. The principle is simple but 92% of clients supported by the Bougardier firm had never heard of it. Your real estate serves as guarantee, and the credit freely finances your project, purchase of another property, cash flow, inheritance, work, contribution to a company. No compulsory insuranceduration up to 25 years, maturities calibrated to your current and future income. As for eligible profiles, owners (primary or secondary residence), heirs, liberals, entrepreneurs… Including after 60 years. Véronique Bougardier ready up to 85 years oldwith a final maturity set at 90 or 95 years.
Cost-wise, expect a rate slightly higher than that of a traditional bank. Where a network offers 3.5% to recover a customer (and sell him additional products), a mortgage loan is located “around 4.2%”specifies Véronique Bougardier. The gap rewards specialization and the absence of obligatory accessory products. “We have bankers specializing in mortgage lending who know how to wait, it’s their job”summarizes the manager. Good news, this credit also remains subject to legal wear ratewhich limits the total cost and protects the borrower.
You just have to know where to turn, and that’s where the problem lies. According to the Bougardier barometer, 92% of customers had never heard of mortgage loan before pushing open the office door. Even more surprising, 75% of notaries do not offer it And 96% of wealth management advisors neither. Lack of information, 65% of heirs sell part of the wealth received to pay inheritance tax. The average amount released by the firm reached 580,000 euros, on average after three bank refusals. “Today, perfectly financeable projects are abandoned due to lack of information.”alerts Véronique Bougardier.
