24/ Obtaining a mortgage in France
It is not difficult to obtain a mortgage to purchase your property in France but it can take between 3 weeks and 2 months depending on how fast you collate the necessary documents. We will be happy to help you if you wish and will be able to recommend bi-lingual, experienced financial establishments who will be able to give you fully qualified advice and offer attractive interest rates.
You must have your mortgage arranged and agreed on before you can complete the purchase and sign your « acte de vente » (deed of sale) at the notary’s, usually 3 – 8 months after you have signed your reservation contract.
There are various options as to where to obtain your mortgage to finance your new purchase.
* MORTGAGE WITH A FRENCH BANK
Currently, as a non-resident, you can obtain a mortgage for up to 30 years for up to 100% of the value of the property excluding VAT, including furnishings and transaction costs.
Just as you can buy different types of mortgages in the U.K., you can use repayment loans and interest only loans, in this last case, you will be required to contribute between 20 – 30% of the purchase value and your personal contribution is placed in an investment bond, which accrues interest throughout the life of the loan, so that when it comes to term, it will contribute towards repaying the mortgage.
* A MORTGAGE BROKER
To take a lot of the hard work out of hunting around for funds we will be happy to recommend a reputable broker to you.
* PURCHASING A NEW BUILD IN FRANCE
When buying a leaseback property in France, payments are made in stages, as the construction work proceeds. When you finance your purchase with a mortgage, those payments are still staged and the mortgage provider will make those payments. Until the development is fully completed, you will only pay interest on the staged payments that the mortgage provider has made. Even if you are using a capital repayment mortgage, the capital will not have to start being reimbursed until the complete loan has been issued, i.e. when the development is completed and ready to rent.
Most lenders will require formal copies of birth and marriage certificates and these can take as long as 14 days to obtain from UK authorities, so remember to request them well in advance.
If you are going the French bank route, most of the application can be done by email. We offer help and guidance to make this application quick and painless.
MORTGAGE REQUIREMENTS:
Each lender will tell which accompanying documents they require, but these are the most commonly requested documents:
When assessing your mortgage application, French financial establishments will only take into account a third of your actual income.
Please note that when buying a property in France with a mortgage, there is an additional mortgage fee of about 2% of the loan. The property is mortgaged or « hypothéqué ». For cash purchases, however, the property is non-hypothéqué or mortgage-free.
OPENING A BANK ACCOUNT IN FRANCE:
If you are borrowing from a French lender, you will be required to open a French bank account in order to make mortgage related payments and to receive your rental income. The most commonly requested documents are:
When your account has been created, you will be given several copies of your « Relevé d’Identité Bancaire » (bank account identity slip). This identification slip, contains all the necessary details for your French (or foreign) creditors and debtors who need to carry out operations on your account (credit transfer, payment, etc.).