Getting a mortgage in France

Financial Services > Mortgages > Holiday Homes > French property as security

If you require finance to purchase a property in France, then Justcredit.biz can help, we are giving you the opportunity to take expert advice from a team of licensed credit brokers, who have over 20 years experience. By using the French property as security a repayment mortgage could be raised depending on your circumstances.

Based upon the valuation or purchase price of your property (whichever is lower) you could borrow up to; 85% of the properties value (in Euros only) for a repayment mortgage, 80% (in Euros only) for an interest only mortgage or 70% in any other major currency.

The minimum loan amount (for transactions using Euros) is €75,000, in all other currencies it is €230,000. The term of the loan is from 7 to 25 years, this can be available for individuals up to the age of 80. Current interest rates as at 5 th July 2003 are from 2.75% Variable for Euro loans and 2% above LIBOR for all other currencies . Fixed rate loans are also available.

The following is an example of a repayment mortgage in Euros; to this you must add the cost of a mortgage protection plan.

Written quotations are available on request

How much can I borrow & what proof of income is required?

There are no non-status/ self-certification mortgage facilities available in France, however renting out your property is permitted, therefore all loans need to be supported by a minimum of, proof of income. If you are employed, you will need to produce, your last three months payslips, P60/employers reference and your last 6 months Personal bank statements. If you are self-employed you will need copies of your Audited Accounts together with you last 12 months business, and 6 months personal bank statements.

The Lenders in France will not take into account any proposed rental income from the property that you wish to buy.

Your loan will be based on your personal (or joint) 'net' pay, and is calculated on an affordability basis. For you to be considered by the lenders in France you total out-goings must not exceed 40% of your net monthly income.

A simple example; If your total net monthly income is £1,000, your total out-goings must not exceed £400, you must have £600 per month to be put towards the mortgage repayments to be considered.

Guidelines for purchasing a property in France

•  We strongly advise that you should take out appropriate independent legal advice before signing the 'promesse de vente' to ensure that you avoid problems with agents immobiliers or Notaires. The bank that is financing you will need a copy of this document along with the application form before they can accept your request for a loan, however it is important that you sign this document 'subject to mortgage finance' as once this is signed it is legally binding whether you have received approval from the bank or not.

•  Where possible; it is advisable to arrange mortgage finance before you agree to buy a property.

•  You will need to have a French bank account, to do this you will need relevant relve d'identite bancaire.

•  Be aware that the Notaire may incorporate their cost with the mortgage, therefore you should establish the Notaire's cost before applying for your mortgage.

•  You must take out a suitable life assurance policy that is assigned to your mortgage, some lenders may offer this free of charge.

•  Not all lenders in France , survey/value your property, so you may wish to have this done independently.

•  Properties can be purchased by an individual, in joint names or in the name of a civil real estate company (S.C.I.). Independent legal advice should be sought before purchasing under the name of a S.C.I.