Home Finance What type of property does the mortgage apply to?

What type of property does the mortgage apply to?


The mortgage loan can be applied to the real estate purchase of a new or old property, whether it is:

  • a main residence,
  • secondary,
  • rental.

And this, regardless of the use of the future good: offices, house, apartment, apartment building or commercial walls.

Affected loan

Depending on the use of credit funds, it is qualified as affected or not. If it is affected, this means that there is a traceability of the amount paid (calls for funds or money transfers on invoice):

  • For a real estate purchase abroad
  • For the acquisition of real estate if you are a non-resident
  • To cover inheritance costs
  • To buy back credits

If you buy a property abroad or if you buy in France for a non-resident, be aware that the bank cannot take a guarantee. In the event of payment default, the legislation prevents French banking establishments from seizing the property. Hence the importance of setting up the mortgage for a property located on French territory.

Unallocated loan

When the loan is unallocated, it means that the amount is paid directly into the borrower’s account with no control over the use of the funds. The unaffected mortgage loan is free to finance several types of project:

  • Business creation or an investment
  • A donation
  • The acquisition of a good (a car, a boat etc)
  • Having cash to go on a trip

In this case, the guarantee taken by the bank will be a first rank mortgage guarantee. That is, it is necessary that you have not already mortgaged the property for a third party (whether it is a real guarantee or a surety), for the benefit of another banking establishment.

In addition, if you have an outstanding loan on the property that you want to put as collateral, it is recommended to carry out a credit repurchase (buy back the outstanding capital) from the bank with which you have taken out the mortgage loan. This then recovers the 1st rank guarantee.

Note that in general, few banks deign to grant unallocated mortgages.


Please enter your comment!
Please enter your name here