French Mortgages
When looking for a mortgage in France, just as you would in, you need to seek the advice of more than one provider. In other words, ask several lenders for a mortgage quote before you decide which lender to borrow the funds from. It is for this reason that FrenchPropertySearch.com works closely with more than one leading French mortgage provider. By working with UCB Mortgage (formerly Abbey France) and Credit Foncier (formerly Entenial), we can introduce you to two reliable mortgage providers, giving you the important choice.
Start your plans early
Searching for the right property is of course very important but, it is essential that you start organising the funds with which to purchase your property, as early as possible. This way you avoid many of the stresses and anxieties associated with property purchase. Most French banks and lenders will give you a good idea of what you can borrow before you even start your French property search.
Considering the preliminary contract
If a mortgage is an essential ingredient to funding your French purchase, make sure a clause is inserted in the preliminary sales contract (commonly know as the sous seing prive or compromis de vente) stating that your purchase is subject to you attaining a mortgage. This way you will be safe from losing your deposit should the mortgage be refused.
When you sign the preliminary contract you will be asked by the Notaire to provide details of the lender and the amount you intend to borrow. This is just a formality and doesn’t mean you can’t approach more than one mortgage provider. If your mortgage applications are refused, you will need to provide the Notaire with a document from the lender mentioned in the contract saying so (as attestation).
How much am I allowed to borrow?
In Britain we are used to calculating how much we can borrow by multiplying our gross yearly earnings by a factor of 3, or thereabouts. In France the calculation is made in a different way and is based on the ratio of a person’s financial commitments compared to their gross earnings. In most cases this should not exceed a ratio of 1.3, or 33.3%. Therefore, your financial commitments (loans, mortgage repayments including the one needed to purchase your French home, rent and any enforced maintenance payments) should not exceed one third of your gross regular income.
For more details, click on the links below.
