Getting a French Mortgage

[Rob G]

Hi there,

I plan to move to France with my wife and children around June next year. We are currently selling our house in the UK and plan to buy one in France. Ideally I would like to take out a mortgage from a French bank (better rates etc.). We are moving to the Paris/Ile-de-France area and I intend to find work in Paris.

We've been advised that we need to allow about 3 months from signing the "promesse de vente" to completing on a house purchase. I have the following questions:

1. Will a French bank/mortgage lender want proof that I have secured a job in France before they are prepared to agree a loan? (If so, this effectively means I need to have a signed contract of employment at least three months before we move - which could be difficult.) Or are there lenders in France who will lend against my current employment and income (which I will have up until the day we move)?

2. We've also considered whether it would be better to seek a loan from a UK-based company to buy a house in France. Is there any real advantage in choosing a loan from a French bank vs. a euro loan from a UK provider?

Any insights would be appreciated.

Thanks,

 

Rob

[Clarkkent]

I know nothing about your circumstances or motives but can make inferences from what you have written. The proposed move is many months away and is "planned" - the impression I gain is that you want a lifestyle change.

I do not know what competence you have in French nor what skills you can bring to a job market where there is high unemployment.

My judgement is that you would be better finding a house to rent rather than buy. Leave decisions about mortgages until you have fully evaluated your new situation.

[Nick Trollope]

[quote]Hi there, I plan to move to France with my wife and children around June next year. We are currently selling our house in the UK and plan to buy one in France. Ideally I would like to take out a mort...[/quote]

French lenders will lend an amount up to one third (in repayment terms) of your income. ie. if you earn 3000E/month then the repayments (for everything; mortgage, car loans, cc, etc) can come to no more than 1000E. Contrary to common belief, this figure is not defined in law and you MAY find a bank willing to bend the rules.

Ergo, if you have no income when you apply for the loan, you won't get a mortgage (most certainly, there are no "no check" mortagages in France).

If you earn money in the UK and borrow in France, you are at the mercy of exchange rates, which yo-yo by about 6-8%. If you have equity in your UK house, you could morgage that, but when you come to sell it, you may be a bit stuffed because remorgages (on the French house) are quite rare. There are UK lenders (Abbey & Barclays, for instance) who will give you a UK mortgage against a French property, but it ain't easy.

CK's comment about rental is sensible, although I would avoid making judgements without more information.

[Alexis]

Don't forget about contracts of employment either.  You are not normally 'taken on' for longer than six months to start with.  It could be less.  This is why many people rent - they are in an unstable job market and/or they are refused a mortgage.

There are places around here where the personnel have been on temporary contracts for over 20 years.  Yves Rocher is famous for that!  Where my OH works it is usually Feb/Dec and then allez oop, dehor!  Fortunately, he is on CDD.  Not CDI.

[Rob G]

Thanks everyone for the tips.

This is not about a lifestyle change. This is a move which we have planned for some time and for various reasons June is the month we are planning towards. I take your points about the job market - I am well aware of the situation and don't underestimate the difficulty in finding jobs. But on the plus side, I speak fluent (and I mean fluent) French and we will be moving close to Paris where there pare perhaps a greater number of openings.

As regards renting vs. buying, we have thought about renting but would ideally like to buy because we believe we would get better value for our money. We're in the process of selling our UK home, which has increased in value considerably so we will have quite a large deposit to put down. If we did rent, we would want it to be for as short a time as possible - the other problem that would raise is that we have two children who will be in school - we don't want to put them in one school near where we rent a house, and then have to move them if and when we buy.

I think what you;re saying is that it's hard to get a job on a CDI, and if you don;t it can be hard to get a French mortgage. Is that a fair summary?

 

Rob

[Nick Trollope]

I think what you;re saying is that it's hard to get a job on a CDI, and if you don;t it can be hard to get a French mortgage. Is that a fair summary?

I wouldn't say so. As has been alluded to, a goodly proportion of the workforce are on "contract". We have a mortgage and have NO French income, I am self-employed (running a UK compamny), 'er indoors is salaried, with a UK company. We had no trouble getting a mortgage, but we did discuss it face-to-face with our bank.

Every circumstance is different. Here, bank managers have alot more power to lend than their counterparts in the UK. Also, with rates as low as their are, lenders are forced to lend huge amounts of money to maintain their margins. You can only ask!

[Tourangelle]

I don't know that rental is that easy necessarily, especially if you are going to be in la région parisienne.  I have friends there who have found it difficult even with steady incomes.  Even here in Lyon to rent a flat well within our income, with Alain as a civil servant therefore more guarantees than a CDI and really not looking at places over our budget, agencies were still wanting caution solidaire.  It was completely ridiculous, and very irritating.  Rental is a good solution if you are not sure you are staying.

Jane