Funding Your French Property Purchase

Before you begin your property search it is wise to have a loan agreed in principle (should you require one) so that when you do find your dream property, not only will you know your budget more precisely, you can also act quickly. You will also need to ensure that you have enough cleared funds in your bank account to cover a 10% deposit to hold the property or 5% in the case of buying a new build property off-plan.

How do I fund my purchase in France?

Unless you are a cash buyer you will need to find a way to fund your French property. Many people choose to release equity from their UK property but you should also consider obtaining a French mortgage. Mortgage rates in France are lower than in the UK and finance is generally easy to obtain if you have adequate income.

As a non-resident, you can usually borrow up to 80-85% of the property price so you will need to provide at least the remaining 15% yourself. Depending on the bank you may or may not have to fund the Notaire's fees yourself as well. If you do decide to take out a mortgage to pay for your French home, and are making the purchase of the property subject to getting a loan, then you generally have 30-40 days from the date of signing the preliminary contract (usually a compromis de vente) to obtain your loan.

 It would therefore be advisable to start arranging an agreement in principle before you begin your property search in order to be certain of how much you can borrow. You also normally only have a period of 10 days from the date when the contract becomes valid to submit all of the papers that the bank is requesting in order to start the loan process. 

If you are unable to obtain a loan from a French bank then your contract becomes null and void and you are refunded your 10% deposit. Please note that if you obtain your mortgage from a non-French bank this law (the Loi Scrivener) does not necessarily apply.

French mortgages are not based on the UK model of income multiples. Instead, French banks apply fairly strict affordability criteria to assess how much they would be willing to lend you.

As a general summary, your monthly French mortgage payment plus any UK mortgage or rent plus any other long-term borrowings (car loans etc) should not exceed a third of the buyer's gross (joint) monthly income. As an example, Mr. and Mrs. Smith's UK mortgage is £500 per month plus they have a UK car loan of £100 per month and the proposed French borrowing is £200 per month which totals major outgoings of £800 per month. Therefore their gross joint income needs to be at least £2,400 (the outgoings of £800x3) per month in order for the French bank to agree to their mortgage.

We strongly advise you supply the following documents to us so that we can contact French banks on your behalf BEFORE you start visiting properties in order to obtain an agreement:

1. Photocopy of your passport.

2. Tax return for the last 2 years.

3. Last 3 payslips or the last 2 balance sheets if you are self employed

4.Last three personal monthly bank statements.

5. Marriage certificate ( when applicable)

6.Repayment schedule of any existing UK mortgages or loans

Do contact us and we will be happy to put you in touch with English speaking advisors in France. Banks usually charge a mortgage arrangement fee and  in most cases with very few exceptions,you will need to take out life insurance cover.