Finance

Here you will find a general overview of the best way to go about getting a mortgage and how to open a bank account.

Introduction

It is easy to obtain a mortgage to purchase a property in France, and there are three ways to do so: against an existing UK property (provided there is sufficient equity), against the French property, or a mixture of both.

There are certain important things a potential buyer needs to know:

As soon as you will have found your dream property in France, you will have  to sign what is called the “compromis de vente” (the reservation contract) at the French estate agent’s office. This is in order to secure the property, and it should at this stage be taken off the market. At this point you should already have decided whether or not you are going to take out a mortgage or if you will purchase cash – if you do decide to take out a mortgage, you should make the arrangements before signing the compromis. Most agents will ask to see the “decision in principle” that you should have requested to your bank prior to your visit in France, as proof that you are credit worthy. This is to discourage people from beginning the purchasing process when they are not in fact in a position to complete the sale. You will also be asked to write down in the "compromis de vente" if you plan to finance your purchase through a mortgage or cash.

If you are taking a mortgage out and you already have your “decision in principle” from your bank, you must have everything arranged and agreed before you sign your "Acte de Vente" (final deed of Sale) at the notary's office. This usually takes place usually two to three months after you have completed and signed your reservation contract ("compromis de vente").

Mortgage options

Mortgage through a French bank

There are certain things to take into consideration involved in borrowing money in another currency. With the right advice, however, even the most inexperienced borrower can successfully buy his dream home.

French banks are willing to lend money at very attractive rates and terms. As a non-resident you can currently obtain a 15-year mortgage for 80% of the property value with a 3.60% interest rate (French residents can borrow up to 100% of the property value, European residents up to 80%).

We have built good relationships over the years with French banks offering attractive interest rates:  for a Free Personalised Mortgage Quotation, please follow this link:

French mortgages are not based on the UK model of multiple incomes. Typically the calculation works on the principle that the total of the French mortgage payment, plus any UK mortgage or rent, plus any other long-term borrowings, should not exceed a third of the buyer's gross monthly income.

The actual process of applying for mortgages in France, again is not difficult, and usually takes at most 2 to 3 weeks but can be done even quicker.

In summary, obtaining a mortgage for a French property is straightforward, especially with our help.

Money transfers for your French mortgage
To help pay for your French mortgage, a currency specialist like Moneycorp, offer alternatives to using your UK bank. They can collect your sterling by Direct Debit and automatically send your euros to your French bank account, so every month you can relax in the knowledge that your transfers are taken care of.

The Moneycorp Regular Payment Plan allows you to get better exchange rates than a high street bank and transfer fees are as low as £4. Compared to a bank you can save a significant amount on transfer fees alone. Banks in the UK typically charge between £17-£40 for an international money transfer, so if you’re sending currency every month you can easily save over £250 a year by using a foreign exchange specialist, on transfer fees alone.

Re-mortgaging
It is common to re-mortgage in the UK to raise money for a variety of purposes. This is not so common with French lenders, although some are starting to offer mortgages on this basis, allowing the borrower to take advantage of rising values and equity. However, generally speaking, if you think you will need additional funds later, it is better to raise these at the time of purchase, when it may be easier to obtain the finance.

Opening a bank account in France
Opening a bank account in France is essential to pay the monthly installments on your mortgage. In order to open an account in France, you just have to bring a few documents (copy of your passport, proof of address and bank statements), fill out an account application form and the bank will send you your account details with a RIB (Releve d'Identité Bancaire or bank account identity slip). It is that simple! To find out more about French Mortgage call us today on 020 7428 4910 or email us at mortgage@sextantproperties.com. We can assist you in arranging the finances to buy your dream property in France.

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