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France: Mortgages in France

French lending criteria

Do I qualify for a French mortgage?

To qualify for a mortgage in France, including Corsica, a calculation is used to establish whether you can afford to maintain the mortgage repayments. This will automatically happen when you complete the application form, and Conti won’t charge you for this service.

How much can I borrow?

• Calculation based on the valuation or purchase price, whichever is the lower

• Up to 90% of LTV available for house purchase, remortgage or home improvements

• Based on joint gross pay, where joint income is applicable

• Existing liabilities, e.g. mortgage or rental payments, loans, credit card payments and maintenance are taken into account, together with the proposed French mortgage payments. All this must not exceed 33% of your monthly gross income. Part of the rental income (up to a maximum of 80%) may possibly be taken into account, if there is an existing rental contract in place.


What evidence of income do I need?

If you are employed:
• Your last three month’s payslips
• Your latest P60 or Employers Reference
• Your last three month’s personal bank statements

If you are self-employed:
• Your last two year’s signed accounts
• Your last two year’s personal tax returns
• Accountant’s declaration
• Your last three month’s personal bank statements.

Example mortgage payments

If, for example, your gross joint monthly income is £2,500, 33% of this equates to £825. If your only liability is your mortgage payment, of say £300, this would leave a balance of £525 for your French mortgage repayment


What types of French mortgages are available?
For our latest rates and to see the different types of French mortgages on offer, please visit our website or speak to one of our advisers.

• Euro loans are available on a Repayment basis up to 90% and Interest only up to 85%. Loans in other major currencies are available up to a maximum of 75%. Loans for Leaseback type properties are available up to 100% of the NET Purchase Price
• The maximum term of any mortgage is 40 years, this varies on the type of loan
• Repayment, Fixed Interest, Interest Only and Capped Rate mortgages are available
• The minimum loan you can take out is €50,000

Essential information for buying properties in France

Buying property abroad is not necessarily the same as buying in the UK, there is other essential information you need to be aware of both before and during your property purchase.

• It is of paramount importance to seek independent advice from a French Lawyer

• It is advisable to arrange your mortgage finance before agreeing to purchase a property..

• You need to ensure that you will have full title to the property on completion and that you have the appropriate documents available for the lender.

• Lenders will not advance funds to purchase or renovate properties that are currently uninhabitable They will consider applications, possibly on a reduced loan to value basis, where all the relevant planning permissions and building licences are in place. French builders must carry out the work.

• The bank will require a signed copy of the “Compromis de Vente” prior to issuing a mortgage offer. However, you are able to sign this contract with the clause “subject to mortgage finance”, noting that once signed, the contract is legally binding.

• You should be aware that not all French lenders carry out valuations and/or surveys. You may wish to have one carried out independently, and this is advisable as this will highlight any structural or building defects such as subsidence, damp, wiring etc. and most importantly, any valuation should point out any potential boundary disputes. The bank does not release any details, even if a valuation is carried out.

• Properties can be purchased either individually, in joint names or in the name of a civil real estate company, known as an SCI (Societe Civile Immobiliere), under French civil law. For an SCI at least two people are required. If you need further advice or information regarding SCIs, check with a French independent lawyer.

• You should check with the estate agent and/or your lawyer that you are aware of the costs charged by legal and Government authorities for buying a French property. The lender will also have their own legal costs for assigning the loan, the cost of which they will normally advise you when they issue the mortgage offer.

• Please note that most mortgage offers have an 11 day cooling-off period from the day of receipt before they can be accepted and returned to the lender.

• A French bank account and the relevant RIB (Releve D’identite Bancaire) will be required before the release of funds.

© Conti Financial Services Limited 2008

This article is reproduced with the kind permission of Conti Financial Services Limited.

For information and advice on overseas mortgages and residential finance in over 30 countries, contact Conti Financial Services Ltd on www.mortgagesoverseas.com

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