Minimum deposit

[Sunshine boy]

Hi,

Is it right that we wound need a larger deposit to buy a property in france?  ie more than 10% (plus fee's of course) - we are first time buyers so don't own a property to release equity etc/  My 'other half' is freelance so would work in the UK/Worldwide so guessing we would need an english mortgage?

Any advice for us novices would be really helpful.

Cheers

[DZ]

This is certainly not an expert advice - just from our recent experience.  I am sure that in most cases the deposit you need is quite high (I seem to remember there were posts about it under the "Buying property" section a while ago), but this is to let you know that we managed to get away with paying just over 1% deposit!  I presume it was the combination of luck and trust on the part of the vendor, but no one quibbled when we said that it was all we could afford to pay at the time we signed the Compromise de Vente.  We went for a French mortgage (through UCB) because time was of essence and getting a "local" mortgage was much easier (all done through the internet).  

I hope your purchase will work as smoothly! 

[Just Katie]

What I remember also is that notaires fees are really high.  I cant remember the percentage but I was pretty shocked.

[Jc]

We paid 5% on signing the compromis,90% on signing the completion and the final 5% when we got the keys after inspecting the property with the vendor and agent.

[Anton Redman]

Sorry to appear as the prick/dentille in the ballon factory of life but if you buy a house via a immobelier and notaire for Euros 120.000 then the vendour receives Euros 103.000.  For a deal like this you need 20 % equity otherwise the lender has no cover. I could not find a pleasent way to make this posting.

[Gardian]

The 'normal' deposit is 10% I think, but as with all things in life, this is negotiable.

We said that we would put up 5% and there was no quarrel (but doubtless because we were buying from another Brit and he probably trusted us).

The question really (as the politicians would say) is how much the property is, that you are buying. Remember that you lose that deposit if you bale out after signing the compromis, so it's a balance: minimise your deposit (just in case), but make it big enough to demonstrate intent.

The other thing is timing. If you've got borrowings to arrange, there can be delays (equally and more so if there's a property to sell in the UK). Try to agree a 'long' date for the Acte de Vente, just in case. You may not need it, but ............ 

Negotiate: there's nothing set in stone.

[Clarkkent]

When I bought, 12 years ago, I told the immobilier that I would find it difficult to lay my hands on a 10% deposit (which would have been about £3000). We agreed on about £800.

10% is just the conventional amount. If you have a problem with this and you are clearly a determined buyer then I don't think you will find it difficult to agree a lower amount.

[Gastines]

I believe you can make condition of the sale completion that you can get a Mortgage. If you fail to get your Mortgage, you can get all your deposit back. Make sure you state this and get it included in the CdV.at the start.

Regards. B&B St.Malo

[Will]

I think there is a bit of confusion here.

I believe the original questioner, and one of the replies, are talking about buying a French house with a mortgage, and asking, effectively, how much they can borrow. The maximum loan in France is normally 85% of the value of the property, though most lenders seem prefer a lower percentage. See http://www.frenchentree.com/fe-finance/DisplayArticle.asp?ID=2171. More important, though, is that the amount lent depends on your income. Lenders in France will not allow repayments on loans (which includes hp, other bank loans etc) to be more than one third of your income. If this is a problem then you need to talk to a specislist French mortgage broker or raise the cash in Britain by mortgaging a British property.

The other replies concern the amount you lodge with the notaire after signing the compromis de vente, whether or not you have a mortgage. Convention says that this is 10%, as this corresponds to the sum you would forfeit if you default on the contract. But it is negotiatble, down to zero, with the agreement of the seller, the notaire and the agent.

Hope this helps.

[Lori]

If the question is how much you can borrow, we borrowed 100% of the

purchase price with Credit Agricole.  I have read here and in many

books that this is not possible, but our bank had no problem doing

it.  They didn't really bat an eye.  In our case, the major

factors  seemed to be the price of the house and the amount of

household income.  The mortgage loan rate was not elevated either.

I'm sure each case is dealt with individually.  May work for some, not for others.

[Sunshine boy]

Thanks so much to you all - some good positive feedback for us!