Offshoreonline share their top 10 tips for ensuring your French mortgage is arranged quickly and smoothly and you can buy your dream home in France
It is never too early to get your finances in place if you are considering buying a dream home in France. Lending criteria in France are more complex and restrictive than in the UK and the whole process can take quite a lot longer than most people expect. Here are Offshoreonline’s top ten tips for ensuring your mortgage is arranged quickly and smoothly.
1. You may be pleasantly surprised by just how little deposit you will need – some lenders will offer mortgages with just a 15% down payment.
2. Remember though that the more deposit you can contribute, the lower your interest rate will be.
3. You will need other bank services such as a current account to repay your mortgage. We can help you set these up as part of our euro mortgage broking service.
4. To apply for a loan, you will need to be able to show how you earn your income – that means ideally being salaried. If you are self-employed, you can still qualify for a mortgage, if you have at least two years of report and accounts records. Finally, pensions can also be used to support euro mortgages.
5. It is a good idea to be “pre-qualified” before you start to search for your dream home. It can avoid complications later on.
6. Just as in the UK, the lender will need to consider whether you can afford the new mortgage – we will work with you to prepare a basic income and expenditure model to present to underwriting.
7. You will need life cover to take out a mortgage in France – however, it is often cheaper to arrange this in France via the bank at the same time as we arrange your mortgage – again we can help with this.
8. Think about how quickly you would like to pay the loan off – there is a wide choice of loan types in France, some are more suited to early repayment than others, some are more flexible than others. We will help you understand the relative merits of fixed rate, variable rate, capped rates and the other types of loan on offer.
9. Just as in the UK, lenders do not usually like a loan to go beyond an applicant’s 70th birthday. There are exceptions to this, but as a rule, the loan will need to be repaid by the age of 70 for the simple reason that French lenders insist upon life cover being taken out and life cover premiums rise significantly if the client is over 65 years old. So borrowers are advised to finalise any loan before this age.
10. Don’t forget the importance of foreign exchange – a source of significant profit for the banks. Think about using a currency specialist, particularly if you are regularly exchanging sterling and euros. Over time, the savings will add up.
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