MORTGAGES
Generally, French banks lend up to 70-80% of the property’s value for non-residents. But this can rise to 100% depending on the bank and the borrower’s profi le. To avoid unwelcome surprises, the best advice is to consult a professional ahead of your project.
When using a broker, is it necessary to pay something up-front and what is the fee like? Mortgage brokerage is a regulated activity which is performance-based only. The fee is payable once the funds are released from the bank to the notary. The fee varies between generalist and specialist brokers from 0.8% to 1% of the project cost with a minimum fee of €3,500-€5,000 on average. In essence, the broker negotiates the rate, the bank fee (frais de dossier), and delivers more value through their advice and time-saving than what they charge on the transaction.
How long does it typically take to get a mortgage off er once the compromis de vente is signed? Generally, it takes between two and three months to get a mortgage off er, depending on the bank and the complexity of the fi le. We like to secure an extra month whenever possible to avoid unnecessary pressure and get better terms. Swiſt execution is important as the buyer pays a deposit of 5-10% when signing the compromis de vente.
Does the fi nancial profi le of the borrower impact the approval process? How can they optimise their chances of success? Absolutely. The bank will assess your income, employment situation, debts and fi nancial stability. A broker can advise on how to strengthen your fi le, for example by reducing personal debts before applying or showing suffi cient savings.
And what if someone has the necessary funds in cash? Are there any benefi ts to still taking out a mortgage? Even if you have the funds, taking out a mortgage can have tax advantages in France. It also allows you to keep liquidity available for other investment projects, renovations etc… which may attract bigger tax benefi ts on the property. In this scenario, a broker will leverage your cash, enabling either a bigger project and/or a lower fi nancial cost.
Is there a loan-to-value (LTV) limit for non-resident buyers? What’s the maximum percentage one can borrow?
28 l Expert Guide
More on the web
More mortgages
advice… FrenchEntrée's relocation pages are packed with information on every aspect of moving to France.
Find answers to questions such as: ‘How much can I borrow?’, How do interest rates affect French mortgages’, 'Can I get a mortgage fot a chateau' and ‘How much does a mortgage cost in France?’ on:
frenchentree.com/ French-mortgages
Do interest rates vary based on where the property is located in France, or are they standard across the country? Rates vary slightly based on the region where you’re buying but the main impact is more on your profi le and the bank’s policy. What might infl uence the fi nancing is the type of property itself, its localisation (urban versus remote), its energy effi ciency score (Diagnostic de Performance Energétique or DPE), renovation work to be fi nanced, and so on. On the other hand, factors like whether it’s a primary residence or secondary home have no impact on the fi nancing rate. Buying property in France as a British
resident can seem complex, but with the right guidance from a specialist broker and a good understanding of the French mortgage market, it’s possible to make optimal fi nancial choices. The low cost of capital and various fi nancing options make France an attractive destination for real estate investment. ■
© Shutterstock
© Shutterstock
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