Buying land for future construction: what is the ideal credit?
A construction project is taking place over many months, it is necessary both to prepare the construction steps but also to choose the right credit to buy the land and finance the construction.
Purchase of land for house construction
Becoming a homeowner does not necessarily mean buying a house already built, it is possible to become the owner of your property by having to choose the land and by erecting the building of your dreams. Many French people take the leap every year and embark on a construction project, but there are many questions that need to be answered, including funding.
To be able to build a house, you have to have a piece of land and then call in a house builder. It is possible to buy both at the same time, ie buy the land and sign the builder’s quote to include both amounts in one home loan, but it is also possible to buy the field apart, with a dedicated credit. The credit will depend on the situation of the borrower but also the amount of the project.
Purchase of land: loan immo or loan conso
A mortgage is only possible from an amount of 75,000 euros, ie below this amount, it will be a consumer loan. Thus, if the construction candidate wants to buy his land, he will certainly use a consumer credit, and will have to finance the construction with another loan afterwards. The disadvantage of consumer loan is to offer higher rates than the mortgage but unlike the latter, no guarantee will be required in the field.
The other solution is to collect the amount of land and construction in a single mortgage , this solution allows to benefit from better loan conditions with a lower rate but the bank will ask a guarantee on the property (mortgage) or by bail. The choice must be made according to the urgency of the purchase of the land but also the borrowing capacity of the home.
Get help and a loan estimate
It is not clear how to get into this type of project or even who to solicit in the financing. It is therefore advisable to use an online simulation, this allows for example to make a request for financing in connection with the purchase of land, it is effective to have an idea of the rates and conditions reimbursement. The simulator can also provide an estimate for a land purchase and construction financing.
Good to know: a personal contribution can make it possible to finance a part or even the totality of the price of the ground, which reduces the necessity of resorting to a credit for this first purchase. Simply, the contribution makes it possible especially to be able to benefit from better conditions of loans within the framework of a mortgage, as much to take the right decision and not to regret its choices.