By Charlotte GAUCHON
8 May 2025
Granting a home loan represents a major financial commitment for both the borrower and the lending institution. Before granting finance, the bank or lending institution is required by law to carefully assess the borrower's ability to repay the loan. This stage, which is crucial to preventing overindebtedness, is governed by legal obligations that have been strengthened since 2016. Understanding these obligations helps borrowers to better understand the process and lenders to gauge the extent of their responsibilities. The legal framework for assessing creditworthiness post-reform 2016 European Directive 2014/17/EU on credit agreements for consumers relating to residential property (known as the "MCD" or "Mortgage Credit Directive") was transposed into French law by Order no. 2016-351 of 25 March 2016. This reform, which essentially came into force on 1 July 2016, profoundly changed the rules applicable to home credit, significantly strengthening...
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