Rip off?

[Angie]

We have obtained a 70,000 euro mortgage on our French house and have an appointment at the end of this week with the Notaire to sign the mortgage document (which we have been told is compulsory before the bank can release the funds).  Obviously we do not have a problem with this, but were advised a while ago that we will have to pay a small charge to the Notaire for this service.  Today, just prior to our visit to France, we have been advised that this "small charge" is 2,400 euros - payable in advance.  Can anyone tell me if this seemingly high amount is usual; our total Notaire's bill for a recent sale and purchase was less than this.  Does the Notaire perform some other function during the mortgage term to justify this extortionate amount, or is it (as I assume) just the preparation of a simple/standard document?

[BJSLIV]

I think you will find that the 2400 Euros is the cost of the financial guarantees required for French mortgages. They will probably be over and above any admin charges.

[Angie]

Thanks for your prompt reply.  Admin charges...surely this doesn't mean there is more to pay?  Would probably have been cheaper for us to obtain a mortgage in the UK, I am sure we would not have encountered these additional fees.  The French bank are also charging us big time for the privilege!!

[maureen]

Sorry, but that's how things work in France - it cannot be compared to the U.K. Pity that you didn't get more information before you started on your adventure. PLEASE.... let all of us here pass our advice on to new-comers. There is so much to learn!!!

[hastobe]

The amount charged does seem a lot - we were told it was approximately

1% of the mortgage (similar to the fee charged by the bank for

arranging the mortgage).  As a comparison, we have been charged

1900 Euros on a 210,000 Euro mortgage - so the amount you are paying on

a 70,000 Euro mortgage does seem very high. 

Btw we were told there are three fees if you take out a French mortgage

- the bank fee for arranging the mortgage approx 1% of amount borrowed,

the notaires fee for registering the legal charge - again approx 1%

of  the mortgage (note this is in addition to the notaires fees

for the conveyance of the property) and a further fee for the mandatory

death (aka life) insurance - for us this was about 500 euro.  It

was still cheaper for us to borrow in France - we are paying 3.75%

fixed for 15 years on our French mortgage compared with a SVR of 6.05%

in the UK - so we recover the initial costs in the first year... 

We are also UK domiciled so the mortgage will reduce our French estate

should either of us die and we have a natural hedge agaisnt the value

of the house.

Kathie

[KathyC]

[quote user="hastobe"]  We are also UK domiciled so the mortgage will reduce our French estate should either of us die and we have a natural hedge agaisnt the value of the house.


[/quote]

Are you sure about this? We are in a similar position to you, but as the life assurance is assigned to the bank (which I gathered was compulsory), when I die the mortgage will be repaid by the insurance policy and the house will be inherited without any mortgage owing.

Kathy