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The Experts guide to french mortgages

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Mortgages are available to residents in France, UK and Ireland. Buying a property in France whether to use for holidays, longer periods or to rent out whilst still residing in the UK is possible. Not all banks allow you to apply online but some allow for the mortgage application to be done online and several have English speaking staff.

Applying for a mortgage

In order to apply for a mortgage you need to be over 18 and hold no county court judgements. The banks will require a knowledge of your financial position and documents confirming your employment, general assets, project and bank details amongst other items. A copy of the ‘compromis de vente’ for the property you are purchasing will also be required.

Self-employed applicants will be asked for additional documentation such as bank statements concerning the company’s bank accounts, statements of accounts (i.e. profit and loss accounts) and SA302 tax calculation forms.

Once your mortgage application has been studied, if you’re successful, a ‘decision in principle’ (DIP) will be issued.

Choosing the right mortgage for you

There is a choice of mortgages – either fixed or variable rate. The duration may run from two – 25 years.

Fixed rate mortgages over a longer duration tend to be the popular choice in France compared with the UK where variable rate and interest only mortgages are often the first choice.

Redemption fees may be applied if you decide to pay it off before the end of its term. Generally the fees will be the equivalent to 3% of the capital reimbursed or 6 months’ worth of interest. The lower of the two amounts will be applied.

Variable rates can be capped at different levels and some mortgages, depending on the characteristics of your project, can have a 0% rate of interest. Eco loans are also available.

With some mortgages, increasing or decreasing your monthly payments or taking a break is possible (subject to terms and conditions).

Life insurance

Life insurance called ADE (Assurance Décès Emprunteur) is recommended when taking out a mortgage. In the event of death during the term of the policy, it covers the outstanding debt. There is no fixed cost for this type of policy as it depends entirely on individual circumstances.

The Mortgage offer

Once you have accepted your Decision in Principle offer, the official mortage offer will be issued and you then have a cooling off period. After this, if you want to go ahead, the offer should be signed and returned by post.

Once the paperwork is complete your Notaire is updated with the information.

The Notaire will later send a request for the mortgage to be released based on the date of the Compromis de Vente signing – the day you take ownership of your French property.

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