Buying your French property with a mortgage
You may need to find finance to purchase your French property. In some cases, even if you don’t need a mortgage, it may be in your interest to buy with a mortgage whilst the rates are so low, even if you could self-fund your purchase. There are several ways to go about this :
- Apply for a Further Advance or Re-mortgage your UK property
- Approach a Specialist French Mortgage Broker who will shop around on your behalf
- Go direct to a local High Street Bank in France and ask for an appointment to discuss your options
- Make contact with a French Bank who deal specifically with Overseas applicants and have a dedicated service
- Ask at an International Bank in the UK
What do you do first and when?
Start before you come over to look for a property in France! Shopping around for a mortgage can take a while and decisions in principle are not immediate. Often a file will not be immediately accepted but will need to be referred for a decision. You can ask for an Approval in Principle before you have found a property – this will save time when you are purchasing, show you are a serious buyer to the person selling the house you find, and confirm the price range of properties you can afford. This service should be free of charge.
How will the Bank decide how much you can borrow?
French lenders look at the affordability of the repayments. Normally no more than a third of your net monthly income can be used to pay existing loans, credit card payments, child maintenance, mortgages or rental payments and your new French mortgage repayments. So if you bring home 1,500€ per month only 500€ can be allowed to service the payment of any debts. Overseas mortgage applicants are only able to borrow up to a maximum of 85% of the property purchase price including estate agency fees. You will need to find the money for the remaining 15% and the Notaire’s fees yourself.
French Banks lend on a repayment basis in almost all cases and will often fix the mortgage rate and repayments for the duration of the mortgage term. You will need Life Insurance to cover the debt.
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