Borrowing to Purchase
Chateau de Chateaubriand
French Mortgage Service:
Our specialist french mortgage partners constantly strive to offer the most complete selection of mortgage products available throughout France and Europe for non-french and overseas residents.
They specialise in sourcing mortgage providers, re-mortgaging, equity release and commercial loans means for our many clients and investors, and would also consider loans for gites and larger properties. There are endless possibilities and circumstances that come with each client; advice should always be valuable but we believe that only when your specific situation is discussed can you receive the most valuable advice for you.
Our experienced mortgage partners are able to offer access to leading providers of international mortgages with the ability to deal with clients from all corners of the world, please ask for list. Whether it’s help with raising finance or advice on how to minimise your exposure to tax whilst maximising your return, they are able to provide bespoke packages to enable buyers to secure their dream home in France.
French lenders must assess how affordable it is for you to take on a French mortgage due to French consumer law. This is done by comparing your outgoings (mortgages, loans, credit cards, rent etc.) to your income. Under normal circumstances, providing your income covers your outgoings (including the cost of the applied for mortgage) by 35%, your application should be successful. It is important to note that each French mortgage lender will assess an application differently based on their current lending policies and quotas which change throughout the year.
Mortgage Application Timeframe
As with any mortgage, a large amount of documentation is required to process an application. Providing all the required documents are supplied in a timely fashion and the application is filled out fully, a mortgage offer will usually be made within 3 - 4 weeks. Interestingly, one cannot accept a loan offer until the set cooling off period has expired, the banks want buyers to really think about their decision before accepting their offer.
Life Insurance must be taken out to cover 99.9% of French mortgages. Standard French procedure is to arrange this cover at the same time as the mortgage and many lenders will only accept application if this is the case. You don't have to use the lenders loan insurance, apply for a mortgage insurance quote here.
Heritage Properties in France
Financial assistance for 'heritage' properties are awarded by the Fondation du Patrimoine, whose main role is the protection and restoration of properties of historic or architectural interest in rural areas.
As a general rule, the assistance is in the form of tax relief up to 50% of costs, during the period when the works are carried, out up to a maximum of 5 years. If you pay little or no income tax (as is the case for nearly 50% of the population), then a grant is payable, up to 20% of the works relating to the external structure.
The grant is only payable when the work has been completed and you will need to carry out the work in compliance with the strict restorations standards of the Fondation. There are a surprising number of modest buildings that have been awarded the classification. The buildings include not merely a house but ancillary buildings and interesting architectural features of an older property. One important criterion is that the property should be visible to the public, so an otherwise interesting but isolated property that cannot be seen by passing traffic is unlikely to be eligible. Accordingly, the main focus of assistance will be on the external areas of the property. Internal parts will only be considered to the extent to which the work is necessary to preserve the integrity of the property.
If you think you may qualify then you can make application to your Regional Office. There are also grants available for properties of major historical or architectural interest through the préfecture. The level of these grants can be quite substantial, up to 40% of the cost of works. There are also a range of tax benefits available for such buildings.
As you might imagine the whole process of seeking financial assistance for a property of this kind is fraught with bureaucratic hurdles. If you own such a property or you seek classification, you should make enquiries to the Service Départemental de l’Architecture or the Direction Régionale des Affaires Culturelles (DRAC) within your préfecture.
Mortgages in France for Home Improvement
Whether your French property is your main or second home you should consider a French mortgage for home improvement. The rates of interest on French mortgages are lower than those in the UK, although there is compulsory life insurance. Far better, if you can, to buy the property in the first place using a mortgage, as you will only have one set of legal costs.
If you become resident in France then you may be able to gain access to a government subsidised mortgage. Whilst the amount that can be borrowed on these subsidised mortgages is limited, they offer a cheap funding source for house renovation. The mortgages are offered through all the main French mortgage lenders. Needless to say, in all cases there are rules of eligibility. In most cases there is an upper income limit, but the thresholds are not ungenerous.
If you work in the private sector in France
you could also be eligible for mortgage obtained through your employer.
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