French Mortgages

Step by Step Guide to apply for a French Mortgage:

Calculate your budget – speak to one of our French Mortgage consultants at Baydonhill International Mortgages (BIM) and obtain a free decision in principle from a local French lender.
Decide on a property. Sign the compromis de vente and transfer the initial deposit with Baydonhill FX to secure the property.
Submit full mortgage application to BIM with all required supporting documentation in order to obtain financial approval within approximately 48 hours.
Obtain full approval for your mortgage application, upon return of a positive valuation report from the bank’s appointed surveyor.
Receive French Mortgage offer by post, keep this for the required cooling period as enforced by French law, before signing and returning directly to the bank.
Set up an International Regular Payment plan with Baydonhill FX to cover monthly mortgage repayments, utility bills etc and give you greater peace of mind.
Transfer purchase price balance and legal fees to your Notaire through Baydonhill FX
Attend mortgage completion at the Notaire’s office, or else arrange a Power of Attorney to do this on your behalf if you are not able to be present. The Notaire will register the mortgage and release the funds to the designated beneficiary.

Eligibility & criteria

Most mortgages are in Euros and will be secured on your French property. Mortgages are full status and proof of income and outgoings will be required. It is also possible to obtain a mortgage in the currency in which you receive your income, if this is different to Euros.

In general, the maximum loan to value (LTV) available in France is 85% of the purchase price, (including estate agent’s fees but excluding French Notary fees) for property purchases under €300,000. For purchases above this figure, we are able to offer 100% loan to value. Our minimum loan amount is €100,000. For loans in alternative currencies, the maximum LTV is 70%.

French lenders assess eligibility on the applicant's capacity to repay the loan. As a guideline, your existing monthly outgoings as well as the repayment on your French loan should not exceed 35% of your gross monthly income. A percentage of rental and investment income can also be considered, as long as you are able to obtain an expert projection of this income. Mortgage, rent, personal loans and maintenance commitments are considered as outgoings. Speak to one of our French consultants to find out the maximum that you are able to borrow.

French lenders will not consider lending to UK companies but it is possible to create a French company expressly for the purchase of a property. This is called an SCI. This type of purchase may be advantageous for groups buying together and can minimise French inheritance issues. However, we do recommend you seek legal and tax advice on this matter

Types of French Mortgages

Mortgages in France can be obtained for the purchase of new or existing properties, gites and properties on leaseback schemes. Please note that if you are planning to move to France and run the gite as your primary income, French lenders will see the request for financing as a commercial venture and will not be able to assist. Therefore, gite financing is only available for those looking for an additional seasonal income and proof of other primary income will be required when making the formal mortgage application.

For renovation and construction loans, estimates must be provided by French registered builders at the time of application. In the case of construction loans, more detailed information will be required. We are able to raise up to 100% of works for construction and renovation works, dependent on the final value of the property upon completion. Funds will be released by the lender directly to your builders following submission of invoices.

Capital raising is available on your property in France and the amount you can borrow will be determined by a valuation arranged by the lender. The maximum loan to value that you can obtain is 70% of the current value of the property. It may also be possible with certain lenders to raise funds on your French property to fully redeem your UK mortgage as well as any personal loans at the same time. However, raising funds to repay UK credit card debt alone will not be accepted by another of our French lenders.

French Mortgage Products

A variety of products are available ranging from interest-only to capital repayment mortgages on a variable or fixed-rate basis or a combination of both. Most mortgage rates are indexed against the Euribor. Terms can be from 5 to 30 years however loans must be repaid by the time applicants are 80. Many of our products do not have any early redemption penalties. For an initial idea of rates and monthly repayments, use our quick quote online mortgage calculator, or else complete a personalized quotation request form and we will send you a tailored quotation.

Timeframe

A financial approval can be obtained from a lender once all the requested documentation has been submitted. This takes approximately 48 hours.

Once your mortgage offer has been issued, you will need to respect a 10 day cooling period, which is a French legal requirement, and will not be able to return the offer to the bank until this time has passed.

A minimum of 6 weeks should be allowed from application to completion.

Life assurance

Life assurance is mandatory with the majority of French lenders requiring borrowers to accept their chosen French provider. In some instances, it may be possible to utilise an existing or new UK policy provided cover, however the policy would need to be assigned to the French lender and would need to cover (at least) the term of the loan and the total loan amount.

Documentation Required

French lenders are legally required to request full documentation proving that the borrower can afford the mortgage repayments, and therefore you will be required to submit a significant number of supporting documents. Please see below for a summary of what will be required. A detailed list will be compiled based on your situation and sent to you with your personalised quotation.

• Proof of identity & residence
• Proof of income & outgoings
• Bank statements
• Property details and documents
• Proof of personal contribution to the purchase

Buildings Insurance

Buildings and contents insurance must be in place for completion. Contact Baydonhill International Mortgages if you would like us to recommend an insurance provider to you.

French Bank account

You will be required to open a French bank account before completion. Baydonhill International Mortgages can assist you with this at no additional cost, if required. Upon the opening of an account, you will receive a RIB, which you will need to give to the lender in order to set up the direct debit for your future monthly repayments.

Monthly mortgage repayments

Please be aware that missing a monthly mortgage payment may have serious consequences and we therefore strongly advise participation in our overseas payment plan. This service gives you peace of mind in the knowledge that your French mortgage repayments will be met automatically each month.

Completion

Mortgage funds will be released by the lender to your Notaire for completion of the purchase.

Typical Set up costs for French Mortgages

Bank’s arrangement fee – typically 1% of the loan amount, although many lenders have caps on this figure. Should the lender wish to carry out a valuation, this will normally be covered by the arrangement fee.

Estate agent’s fees - these can be included in the loan amount for majority of capital repayment products and selected interest only products.

Notaire’s Fees – your Notaire will provide you with a breakdown of fees payable once a sales agreement has been signed. If you take out a French mortgage at the time of purchase or at a later stage, a further cost will be passed on to you by your Notaire for registering the mortgage with the land registry.

BIM charges a non-refundable application fee of £250.

We recommend that professional legal & tax advice should be sought to protect your own interests.

French Mortgages

Table of Contents