Obtaining a mortgage

[Nina G]

First posting from me!

We intend to buy a house in France in the next 6-12 months, with the intention of moving there permanently by the end of 2007. I have just about got my head around the French property purchase process but I am completely bewildered by what we can do about the mortgage we will need to make the purchase, although once our UK home is sold then this mortgage can be paid off completely i.e. we will have mortgage free living in France.

As we will be paying the mortgage from the UK then I assume that it would be better to have a UK mortgage on the French house (comments welcome)? If so, what are my options - I know we can remortgage our UK house, but are we able to take out a completely separate mortgage on the French home (we have a 25% deposit)? I've spoken to our existing mortgage provider and they will only offer a remortgage, but does anyone have any pointers on where I can start researching companies who will give me a sterling mortgage on an overseas property? Or, as we will only require the mortgage for a couple of years, is there another option?

Other comments on the mortgage process also welcome. Thanks in advance.

[Paul Bradford]

Hi,

 

Try Abbey National at www.abbey-national.fr. You will find very helpful English speaking staff. I have no link with them, we just tried them ourselves. They tried very hard for us, but due to our financial situation at the time were unable to help.

Hope this helps

regards

Paul Bradford

[makeiteasy]

Dear Nina,

 

yes you have different options: you could of course remortgage your house, but either in France you could have a bridging loan which could be interesting if you intend to repay it within 2 years.

Another solution could be to get an interest only mortgage thanks to the fact you have 25% deposit(also named "pret in fine") or at least just have a "normal"(for french people)mortgage including repayment of capital and interest monthly.Of course, there are specific rules to respect in France to set up your mortgage, but if it's allright just make your choice

If you are still lost, don't hesitate to contact me by email and i'll explain further all those options.

Cheers.

 

Céline MONIER

 

[moon]

A mortgage (remortgage) on your UK house may be your best bet, especially if you want to clear the loan on sale of your UK house, just watch out for early repayment charges if you take advantage of any of the specials available.

One other word of warning, if you get a french mortgage or I suppose an english mortgage specifically on your french house you may well find you dont actually have 25% deposit. Notaires fees and immobiliers fees which can be substantial especially at lower end of market are not mortgageable. Friends bought a house for £60,000 with help of french mortgage then found that they could only borrow on £54,000 value excluding immobiliers fees.

They had to pay £6,000 plus £3,000 notaires fees plus £5,400 10% deposit a total of £14,400 when they had assumed with a 90% mortgage only paying £9,000 (notaires & 10%).

Bob

[Nick Trollope]

Bob is quite right, although I wouldn't advise using a UK mortgage, if you can get a French one - especially for a short term. Bridging loans without monthly repayments are available here & at an interest rate that puts the UK lenders to shame.

I also doubt if you can borrow the dosh for the fees, although despite what others may tell you, 100% mortagages (for the capital amount) are available - so your 25% will cover everything else.

Mortgages are going begging here - the banks are desperate (they must be, they lend to the likes of me!). Contact a Broker (like franceaddict, above) - their services are usually paid for by the bank (I use a broker) & it costs nothing to ask. Don't bother with the UK Banks lending in France, too difficult & too expensive.

The only downside to a Euro mortgage is if you earn your dosh in Sterling - you may have to gamble on the £/E exchange rate staying put - but it has for quite some time now... Of course, exchange rates can also work in your favour - if only it was guaranteed...

 

[Quantum]

Salut tout le monde

We're going through the process of obtaining a mortgage in France and although the bank have messed up at every possible stage, we will eventually get a much better deal than from any UK lender. Under 4%, c'est un cadeau!

Downside; we've been pushing papers since December and are assured that the offer will arrive sometime next week. This is what they say every Monday though, so I'm not holding my breath.

The deal they are offering includes monnies for the notaires fees which is a bonus. And do keep an eye on Credit Mutuelle as they will shortly be offering a sterling account facility where you choose when to transfer your funds and at no extra charge.

Hope this helps, if you have any other questions I'm happy to share our torrid experience.

Quantum [email protected]

[Fi]

Hi Nina,

We purchased our house at the end of last year through a mix of a remortgage on our UK house and a euro mortgage on the value of the french house - whilst this obviously may not work for everyone it has worked out well for us.  We transfer the requisite euros every month through a UK exchange broker into our french bank account & then the mortgage payments for the french mortgage are taken from there.

We used Entenial who offered a very good rate, were very helpful and the process (compared to what we had experienced with a UK broker who nearly lost us our property) was relatively quick and painless.

Fi