We have a close working relationship with many French banks that will lend to non - French residents for either a main or
second property and are able to negotiate advantagous interest rates based on our clients individual requirements. Each file is different
based on how much you want to borrow, for how long, the area of France you intend to buy in, your future plans, your age and
residential status. We are independant brokers and are not linked to other agents, advisors or insurance companies so we work only for you to
give the best advice and to provide the most suitable finance possible for your French property purchase.
We are happy to discuss by phone, fax or email your particular aims at the earliest stage before or as you start your property search. We recommend that our clients pre qualify for finance when possible. There is no charge for arranging this for you and you are not tied to any particular lender but it is of great help when negotiaiting the purchase price by confirming to the French property agent and to the seller that you are a serious buyer and the mortgage funds are available subject to an independent valuation.
As French speakers and with our own property in France, apart from just arranging the loan, we can liaise with the notaire from the contract to buy stage to make sure all the right loan clauses are included, through to the completion and will keep you and your estate agent informed throughout the process. If your legal French is a bit rusty we will be happy to negotiate with the property agents and if you have queries on the legal aspects we can ask the notaires advice on your behalf. We can also recommend good UK or French based lawyers to help with this if necessary. We can also arrange for French bank accounts to be opened and for property insurance to be put into place.
The banks will lend in Euros with security taken over the property in France.
The minimum loan amount with most banks is 50,000 Euros and the loan terms are from 7 to 30 years. Interest only loans are available for up to 20 years. Fixed and variable rate loans are available, with some variable rate loans having the option to switch into a fixed rate, or to extend or reduce the term of the loan. Fixed rate loans are fixed for the whole term of the loan and carry a redemption penalty for early repayment. Loans must be repaid by the age of 70 for capital and interest loans and age 75 for interest only loans.
Banks will lend up to 85% of the "net vendeur" purchase price for older properties, sometimes more if it is a new property or if you intend to be resident in France. This price does not include any notaire fees. It is also possible to borrow up to 85% of any renovation costs if formal itemised quotes for building works are submitted with the application at the time of purchase. 85% loans must be a minimum of 75,000 Euros, below this amount the maximim loan normally available is 80% for non French residents.
70% loans are available for leaseback property purchase and refinance on original UK equity release loan is possible, e.g. you refinanced in the UK to buy your French property. It is now possible to arrange a loan against your French property and to repay the original UK loan.
Equity release is available at 70% of the valuation price, Notaires fees which include the taxes for purchase and loan registration are very approx 6-7% of the purchase price for residential loans. It should be possible to ask for a notaires estimate of fees from the agent when you finalise a purchase price.
Variable rate loans start at the moment for non residents from 4.65%, and fixed rates from 4.95%. As rates can change please contact us for current information. One important factor to bear in mind is the bank margin included in the interest rates. Most loans in France have a fixed margin for the whole loan term eg 1.1% for a 60% loan to value which is on top of the EURIBOR base rate which varies between a 3 month rate, 6 month rate or annual rate. For example if you choose a variable rate reviewed each 3 months e.g. The 4.65% for a 60% loan, after the first 3 months the loan will be based on the Euribor 3 month plus a bank margin of 1.1%.
The banks will charge an administration fee on acceptation of a loan offer or after completion which is normally 1% of the loan value usually with minimum and maximum fees of 700 to 1,500 Euros. Life insurance is usually needed. Our own arrangement fee is 1/2% of the loan amount payable only when an accepted loan has been agreed. The minimum fee is £300 and the maximum is capped at £500. This covers all our costs from beginning to end and includes all our advice and services - if you do not need all of the services we offer this can be reduced by mutual agreement. We also receive commisson from the banks we introduce our clients to.
If you would like a quote to know your own borrowing capacity before you go to France, we will need details of your income and any outgoings for loans, mortgages and rent, the amount you want to borrow, the price range you are looking at, and the length of term you want the mortgage over. Please click on the"contact us" and fill in the details.
To enable us to arrange a loan in principle from a bank before you sign a contract to buy, good photocopies will be needed and should be sent to us by post or by fax or email to include; proof of last 3 months income, last 3 months main bank statements, rent and /or mortgage and any other loan outgoings, passport, & proof of country of residence e.g. driving licence. You will also need to fill in bank application forms which we can post or fax to you for the banks to be able to enter your details on their computer and to be able to do a bank prequalification letter for you. There is no charge for doing this and you are not committed to using the bank that does this letter for you. The loan offer is in principle only and is subject to property valuation, bank and employer references, etc.
We look forward to hearing from you if we can be of help.
