Self-construction, that is to say the fact of building your own house, is a practice that is spreading more and more, both for its attractive cost and for the personalization of your home.
Whether you are a handyman at heart, just an adventurer, know that it is not easy to find a mortgage by embarking on a self-construction project. However, it is not impossible: we explain.
Specificities of self-construction
Resorting to self-construction is above all a life project in which we are often 100% involved. The advantages are numerous: personalized house, savings on labor, affordable materials, rewarding achievement …
But, self-building is not without risk, unless you are in the building trade, you will have to face many obstacles. In addition to the time constraints, the stress, the storage of materials, you will also have heavy administrative formalities to manage: study of the soil, servicing the land, drawing up construction plans, requesting a building permit, obtaining a mortgage. …
Self-construction must be a carefully considered and costed project. You can build your home from A to Z or bring in craftsmen for services that you do not fully understand. However, you will need to obtain a mortgage to complete this adventure, and many banks are reluctant to finance self-construction.
Particularities of mortgage for self-construction
After being well informed, having weighed the pros and cons and considering all the solutions available to you, your decision is made: you embark on self-construction. You will have to build an extremely solid mortgage loan file for the bank to follow you.
Indeed, self-construction, unlike other real estate purchase projects, does not allow the bank to take the usual guarantees, such as a bond or a mortgage. The financial risk, for banking establishments, is therefore not to be able to recover the capital in the event of default by the borrower.
This is why, in addition to strictly respecting the conditions required for obtaining a loan, such as holding a permanent contract or being a civil servant, having a debt ratio of 33% maximum and still providing 10% minimum financing, you will have to offer additional guarantees.
Our advice for obtaining a home loan for self-construction
It is important to be particularly involved in your project, to show the bank that you have your head on your shoulders and that you have considered the best and the worst. Your profile must therefore be reassuring.
To do this, here are the five essential tips:
- Prepare a costed and exhaustive file to know the exact amount of financing: price of materials, quotes from craftsmen, rental of equipment, cost of insurance
- Only take care of the finishing work and have recourse to building professionals for the construction of the shell
- Have a soil study carried out to limit the risks inherent in the nature of the chosen land
- Obtain structural damage insurance, it is difficult to obtain for self-construction, but there are still some insurers accepting the risk for projects below 150,000 euros
- Be convincing, show the banker that you have the capacity to lead this project head-on, thanks to your past experiences and your tenacity
Finally, the last step will be to find the bank most inclined to finance your project. And not all will accept it, you might as well know it in advance to avoid disappointments …
Find the partner bank for a self-construction project
Now that your borrower file is well put together and that you have all the necessary documents, you will have to approach the banking institutions. You can tackle it alone, or use the services of a broker to help you obtain the financing you want on the best terms.
The use of online mortgage simulators can also be of great benefit to you, by putting you in direct contact with the bank branches that may accept your request.
Among the institutions most often financing self-construction, we can cite Crédit Foncier, Crédit Coopératif or even Crédit Agricole.