Information
about mortgages in France
Information about mortgages in France
I
don't live in France, can I get a French mortgage?
Yes! You don't have to live in France to qualify for a French
mortgage although the property you are buying must be in France.
It is even possible to arrange the mortgage, French bank account
and completion on your French property purchase without having
to travel to France. We arrange mortgages for customers from countries
the World over, including the UK, Ireland, US, Australia, Russia,
Belgium and United Arab Emirates to name a few.
I
live in France, can you help me?
Yes! We can help expatriates that are already living and settled
in France. Typically scenarios where we can be assistance if you're
already in France are new purchases, re-mortgages, post mortgage
finance and equity release.
What
loan to values are available for French mortgages?
Most French banks will offer mortgages of up to 80% loan to value
(or price, whichever is the lower), however we do have some mortgage
lenders that will 85% and 90% as well. In some rarer cases 100%
mortgages are available but entry level criteria and restrictions
apply.
How
can I find out how much I can borrow?
The most reliable way to find out how much you can borrow would
be to complete a Free decision in principle request or give us
a call and have one of our expert advisors consider your individual
case. Every person's situation is different and mortgages are
not one size fits all. Our personalized approach to French mortgages
will ensure that the advise you are given is adapted to your specific
situation each time.
Due
to French consumer law, lenders have to assess how affordable
it is for you to take on a French mortgage. To do this, they will
take into account any existing loans, mortgages, outstanding credit
card balances which are not paid off in full at the end of each
month, child maintenance, rents etc. that you may have as fixed
outgoings. They will compare this with your income and providing
that your outgoings (including the new mortgage for which you
are applying) do not surpass 33 - 35% of your gross income after
national insurance (or social security) contributions) then your
application should be successful. Due to the nature of the French
banking system some flexibility is available in certain cases.
There are many exceptions to these rules, the only way to be able
to know for sure is by contacting us and having one of our experienced
advisors look at your financial situation. Some of our lenders
will go up to 50% debt to income ratio!
Each
lender will assess an application in a different manner depending
on in-house policies so it is therefore impossible to predict
100% the outcome of any mortgage application, although our lengthy
experience in this domain does help in assessing potential borrowers
and advising which lenders would be susceptible to agree to your
mortgage. If you would like to find out more, please complete
our Decision in Principle form.
I'm
self employed, will I qualify?
We are often asked whether those who are self employed or company
directors can obtain a French Mortgage. The answer is often yes,
but it is impossible to speculate as each case is very different.
Generally, three years of accounts and tax returns are required.
Please contact us if you would like
to find out more.
What
interest rates are used in France?
French mortgages are based on the Euribor index (EURIBOR stands
for Euro Inter Bank Offered Rate) and are either based on the
Euribor 1 Month, 3 Month, 6 Month or 12 Month Index. To find out
more about the Euribor, please visit the official website: http://www.euribor.org
What
types of mortgages exist in France?
There are plenty of different mortgages in France including fixed
rate, tracker rate and capped rate mortgages. Take a look at our
French Mortgage product
page for more details.
I
want to pay off my mortgage early. Will I have early redemption
penalties?
This is an important question to ask and each mortgage will have
a different answer. Typically if you have early redemption penalties
in France they will be six months interest on the capital to be
reimbursed, limited to 3% of the outstanding capital. In most
cases it is possible to obtain a French mortgage where you have
no early redemption penalties.
Can
I increase my monthly payments or make lump sum over payments?
With a suitable mortgage yes you can. We can assist you in ensuring
that this option is available to you.
Do
payment holidays exist with French Mortgages?
Yes! Again it depends on the exact mortgage that you are taking
but French mortgages with the possibility to take payment holidays
do exist. Our mortgage advisors will help establish what you require
in terms of flexibility and will be able to propose suitable mortgages
offering this option.
Can
I get a French mortgage for Buy to Let and Leaseback Properties?
Lots of people are currently purchasing buy to let and leaseback
property in France as these are attractive investment alternatives
to buy to let property in their home countries.
Some of our panel of carefully selected lenders will take into
account a % of your future rental income from leaseback or buy
to let property. In the case of buy to let property you will need
to sign a management contract with a lettings agency for this
to be taken into account.
For leaseback property, we are often asked if our panel of lenders
will provide a mortgage on the VAT exclusive purchase price or
the VAT inclusive purchase price. The answer to this question
is that it depends. We have lenders that will lend on both the
ex VAT (called HT in French) and the inc VAT (TTC) prices depending
on whether or not the developer is advancing the VAT. (Only a
small percentage of developers advance the 19.6% VAT rebate associated
with new build leaseback property).
The
French property I want to purchase requires renovation work. Can
I get a mortgage for this too?
It is possible to finance the renovation works as well as the
property purchase with a French mortgage. You will be required
to provide quotes from a registered tradesman at the time of the
mortgage application; we can assist in liaising with your agent
in order to obtain these. Once the mortgage granted and the property
is owned by you, the bank will then release the funds for each
stage of the work as it is completed. Your French Mortgage Direct
mortgage advisor will assist you with each staged payment and
help establish a schedule.
Do
I have to take French life insurance cover?
It is mandatory to take life insurance in France to cover the
mortgage. The standard process is that this is arranged at the
time of the mortgage and most lenders will only accept an application
if this is the case although recent regulations mean that lenders
are supposed to accept life insurance cover from other insurers
so long as it is equal to the cover they offer. This is a grey
area with some banks for non-resident customers and they still
insist that you take their insurance. We can negotiate this on
your behalf and help you obtain the best life insurance deal available.
For some of the 70% LTV mortgages we can arrange there is no requirement
to have French life insurance cover, it is completely optional.
Some of our French lenders accept that you assign an existing
policy or allow you to shop around to get the best insurance for
you. We can assist you with regards to this - it could be a considerable
saving!
How
much do French banks charge to arrange a mortgage?
The French Mortgage market is a lot less competitive between lenders
than the UK market, and most lenders only have a handful of products
on offer compared to UK lenders who may have a dozen or so at
least!
All
French lenders will charge a set up fee (often called Frais de
Dossier) which can either be fixed, or a percentage of the loan
taken out.
Any
quotes we provide will include information relating to the set
up fee although it is important to understand that these may change
as they are dictated by the lender.
Will
I need a French bank account?
Yes! If you take out a mortgage in France you will need a French
bank account for your direct debit payments. It is advisable to
set one up at the same time as you make your mortgage application
and we will assist you with this.
How
Long Does an Application Take?
If you are applying for a French mortgage you will be required
to provide numerous documents such as your last 3 months bank
statement, savings accounts statements, mortgage statements etc
(we will provide you with a comprehensive list of documents required
when you select a mortgage).
Providing
that the application you file is complete and no documents are
missing, a mortgage offer can usually be issued within 2 - 6 weeks.
We can usually fast track urgent applications providing the application
is complete.
Want
to find out more? Contact us today!
