Posts in category: Transactions

Financement : propriété d’une valeur de 510 000€, Paris.

Paris 11

Le profil

Lieu d’achat : Paris 11

Prix de la propriété : 510 000€

Montant du prêt : 408 000€

Durée du prêt : 15 ans

Type de prêt : amortissable

Taux d’intérêt : 1,80% fixe

Quotité de financement : 80%

 

Le contexte

La cliente voulait obtenir la quotité de financement la plus élevée possible au meilleur taux possible du fait d’une contribution personnelle limitée. En effet, elle venait de rembourser son prêt immobilier sur une autre résidence secondaire.

La banque qui a été d’accord sur tout n’accepte toutefois pas de financer les honoraires des agents immobiliers. Ils doivent être payés grâce aux fonds personnels du client.

Notre approche

Afin de réduire le dépôt au maximum, nous avons demandé à l’agent immobilier et au vendeur si nous pouvions réécrire le contrat de vente afin d’ajouter les frais d’agence au prix d’achat. Bien que cela augmente un peu les frais de notaire / taxe hypothécaire et le montant des intérêts versés sur 15 ans (de quelques milliers), cela a permis à la cliente de conserver environ 20 000 € de ses fonds personnels au moment de l’achat, fonds qu’elle a pu allouer à la décoration de la propriété.

La cliente était très satisfaite de la solution en répondant à son problème sur le court terme. Le problème de l’intérêt supplémentaire payé pourra être résolu en remboursant l’emprunt plus tôt.


Latest transaction: €408,000 Loan for a property in Paris.

Paris 11

The profile

Buying in: Paris 11th
Property price:
€510,000
Mortgage amount: €408,000
Mortgage type: Repayment
Mortgage term: 15 years
Interest rate: 1,80% fixed
Loan-to-value: 80%

The background

The client wanted the highest LTV available at the best possible rate as her personal contribution was limited because she had just paid off the mortgage on another second home.      

However, the bank that was ticking all those boxes would not finance the estate agent fees and insisted that they must be paid by the client.

Our approach

In order to reduce the upfront costs as much as possible, we asked the estate agent and the vendor if we could re-write the compromis de vente and add the estate agent fees to the purchase price. Though it slightly increased the notary fee, mortgage tax and the amount of interest paid over 15 years (by a few thousands), it allowed the client to reduce her upfront costs by €20,000. She could then use this sum to decorate the property.

The client was very pleased with the solution as we fixed her short-term issue. The extra interest could also be resolved by repaying the mortgage early.


Financement d’une propriété d’une valeur de 942 500€, Courchevel.

courchevel 942,000

Le profil

Lieu d’achat : Courchevel, Alpes

Prix de la propriété : 942 500€

Montant du prêt : 659 400 €

Durée du prêt : 20 ans

Type de prêt : Amortissable

Taux d’intérêt : 1,80% fixe

Quotité de financement : 70%

 

Le contexte

Notre client résidant à Londres a décidé d’acheter une résidence de tourisme à Courchevel.

Financer une résidence de tourisme peut s’avérer plus difficile qu’une propriété classique. En effet, certaines banques refusent catégoriquement de financer ce type de bien en raison de l’obligation de location imposée quelques semaines par an, sur une durée s’étalant sur plusieurs années (en fonction du contrat).

Le client souhaitait à l’origine un prêt “In Fine” afin que les loyers couvre les versements d’intérêts mensuels. Cependant, les prêts immobilier de cette catégorie ne sont pas toujours possible pour les développements de la Résidence de Tourisme, et ce fut le cas ici. Également, le client souhaitait acheter la propriété par l’intermédiaire de son entreprise afin d’optimiser fiscalement l’opération.

Notre approche

Le client pouvait choisir entre une quotité de financement de 70% sur 20 ans ou de 80% sur 15 ans. Comme il souhaitait à l’origine un remboursement faible pour que le loyer puisse couvrir les paiements, il lui semblait évident de choisir l’accord à 70% sur 20 ans (taux identiques).


Financement d’une propriété d’une valeur de 7 040 000€, Méribel.

Meribel 7,04M

Le profil

Lieu d’achat : Méribel, Alpes

Prix de la propriété : 7 040 000 €

Montant du prêt : 5 280 000 €

Durée du prêt : 20 ans

Type de prêt : Amortissable

Taux d’intérêt : 1,95% fixe

Quotité de financement : 75%

 

Le contexte

Le client souhaitait un emprunt le plus élevé possible afin d’optimiser ses impôts. Le tout, en maintenant un taux le plus bas possible et un remboursement mensuel fixe afin de planifier ses finances sur le long terme, ce qui signifiait qu’aucun taux variable n’était possible.

Notre approche

Le client souhaitait un emprunt le plus élevé possible afin d’optimiser ses impôts. Le tout, en maintenant un taux le plus bas possible et un remboursement mensuel fixe afin de planifier ses finances sur le long terme, ce qui signifiait qu’aucun taux variable n’était possible.


Latest transaction: €5,280,000 Loan for a property in French Alps.

Meribel 7,04M

The profile

Buying in: Meribel, Alps
Property price:
€7,040,000
Mortgage amount: €5,280,000
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 1.95% fixed
Loan-to-value: 75%

The background

The client wanted the highest mortgage possible to optimise his tax whilst keeping the rate as low as possible. He also wanted the same monthly repayments in order to plan his long-term finances. This meant that a variable rate was out of the question. 

Our approach

The challenge was to make sure that the Risk Committee at the bank would be willing to finance their biggest mortgage ever.

We built a very organised application and presented it in the way that Risk Committee prefers  – thanks to the help of our contact at the bank – in order to convince them that there was actually no risk for the bank. 

This ended up becoming the biggest mortgage of the year for French Private Finance and we managed to secure an excellent rate, fixed for the duration, with no collateral required by the bank and quite a high LTV (75%).


Latest transaction: €940,800 Loan for a property in French Alps.

Megeve 940,800

The profile

Buying in: Megève, Alps
Property price:
€1,470,000
Mortgage amount: €940,800
Mortgage type: Fixed Interest Only
Mortgage term: 12 years
Interest rate: 2.65% fixed
Loan-to-value: 64%

The context

This client, working in the heart of the City, dreamt of purchasing a property in the Alps. He has been looking for a while and finally found a refurbished four-bedroom apartment in Megève. 

He wanted an interest-only loan as this would allow him to keep the repayment costs down. He planned to make the payment at the end of the 12-year period using his workplace share incentive scheme and his 25% tax-free pension lump sum which he will receive when he turns 55.

At the same time, the client wanted to refinance his current main residence deal with a bank in the UK. He also had an interest-only mortgage on this property by taking a further advance on a very advantageous fixed deal which was increasing his debt ratio drastically.

Our approach

We studied his information and concluded that the client has a very good profile for the purchase as he would meet the 40% debt-ratio criteria and had a good mix of net assets which consisted of investments and goods, such as art and wine. This is essential to cover an interest-only loan. It is important to present the information like this right from the start so that the underwriters look at the file from the right angle. 

The usual threshold for waiving the insurance on interest-only terms is 60% and there are usually further conditions which need to be met. The LTV at the time was 68%. We managed to get both parties to meet half-way and reduce his LTV to 64% and waiver the life insurance. 

Finally, the client wanted to purchase the property through an SPV, so we introduced him to a notaire who can set up a SARL.


Latest transaction: €188,500 property in Joannas, Ardeche

Ardeches

The profile

Buying in: Joannas, Ardeche
Property price:
€188,500
Mortgage amount: €100,000
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 2.40% fixed
Loan-to-value: 53%

The context

A small British business owner of Isreali descent was interested in acquiring a property in the Ardeche mountains as a summer retreat for him and his family. They’ve visited the area on a number of occasions and found the right property at last. 

They were keen to buy the property using a mortgage and originally considered borrowing money from the bank back in the UK. However, they were concerned about the poor exchange rates and looked for alternatives for finance in France. 

Our approach

French lenders will carry out some extra checks to make sure that the company is financially healthy. At French Private Finance (FPF), we take a look at the last 3 years of accounts and tax returns to ensure that the borrower can afford the mortgage.

Oftentimes, the business owners will pay themselves a small income and a large dividend. Sometimes this can be problematic, especially if the dividends are fluctuating or are decreasing each year. The key here is to keep the dividends steady or increasing year-on-year. 

With that in mind, FPF was capable to show the lenders that the client could afford the mortgage and prove that the company is financially healthy. 

“Your home may be repossessed if you do not keep up repayments on your mortgage”  

“French private Finance Ltd is authorised and regulated by the Financial Conduct Authority”


Latest transaction: €164,800 Loan for a property in Salies de Bearn.

salies

The profile

Buying in: Salies de Bearn, Pyrénées-Atlantiques
Property price:
€204,785
Mortgage amount: €164,800
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 2.00% fixed
Loan-to-value: 80%

The context

A Spanish-British couple wanted to purchase a holiday home close to the popular and historic 

seaside resort of Biarritz in the SW of France, a few miles from the Spanish border. They had struggled to obtain a mortgage because they were currently living in the USA where, despite being on temporary expat contracts, the US Revenue and Customs required them to fill in tax forms on their global assets. This created a number of reporting issues for several European lenders that they applied to, and the couple were soon snowed under with paperwork. Because of these complications, the number of banks left that the couple could still try and get a mortgage from was greatly reduced. 

Our approach

French Private Finance (FPF) was required to provide both UK and US tax returns to the lender – US tax returns being a lot more comprehensive than their UK counterparts. The bank was aware of the complex US Federal and State tax system, and were able to pick up the key elements in order to put the application through the bank’s compliance department.

Upon receiving the signed compromis de vente, it transpired that the property needed some small but urgent works. The lender agreed to finance these; however, they asked for a quote from a local contractor. In order to facilitate this, French Private Finance used their local knowledge to source several quotes, which proved satisfactory to the lender. 

Lastly, the clients needed to take out a life insurance policy, which is a requirement for most banks in France when taking out a mortgage. FPF used a specialist French insurance broker for this, because not all insurance companies in France are able to insure US residents. 

“Your home may be repossessed if you do not keep up repayments on your mortgage”  

“French private Finance Ltd is authorised and regulated by the Financial Conduct Authority”


Latest transaction: €390,000 property in the Var

cotignac-image

The profile

Buying in: Cotignac, Var
Property price:
€390,000
Mortgage amount: €331,500
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 2.40% fixed
Loan-to-value: 85%

The context

A couple from London was looking to buy a property in the South of France as a holiday retreat for the whole family. They had previously missed out on several properties as they were not able to secure a mortgage quickly enough, or they had lost out to cash buyers.

Eventually, they found a property in the small village of Cotignac. Although it was a little further away from the sea than they had originally anticipated, the property was still within an hour’s drive of the international airport at Marseille – as well as the beaches of Sainte Maxime and Saint Tropez. 

Our approach

The clients wanted to put down the smallest deposit they could, and also wanted to be sure that the mortgage would be fully paid off by the end of the term. They were keen on securing a mortgage as fast as possible – ideally before the school holidays. 

French Private Finance (FPF) initially investigated the possibility of a 25-year repayment mortgage. However, upon analysing the couple’s situation more closely, FPF recommended that the client reduce the duration to 20 years. Although the monthly instalments increased, the clients would ultimately save a considerable amount of interest over the duration of the mortgage. 

French Private Finance were able to do several things to ease the couple through the purchase, including helping them open a French bank account without them having to fly over to France. FPF were also able to help them find an alternative to the traditional way that French lenders operate. The banks usually require separate life insurance cover to be taken out with them or an approved partner, but in this case FPF used a UK-based insurance broker – and without the need for the couple to have to undergo medical examinations, a solution that was accepted by the lender. Another plus: UK insurance premiums are generally lower than in France.  

“Your home may be repossessed if you do not keep up repayments on your mortgage”  

“French private Finance Ltd is authorised and regulated by the Financial Conduct Authority”


How to Finance: €1.25 Million property in Sainte Maxime

guillaume-baudusseau-399124-unsplash

The profile

Buying in: Sainte Maxime
Property price:
€1,250,000
Mortgage amount: €700,000
Mortgage type: Interest Only
Mortgage term: 20 years
Interest rate: 2.45% fixed for the duration
Loan-to-value: 56%

The context

The client was buying a fabulous property in the south of France, near Ste Maxime. He had a few requests and FPF delivered:

  • Interest Only: check
  • Fixed rate for security: check
  • No life insurance: check (which is amazing on an interest only mortgage as the bank’s risk does not decrease over time)
  • Quick process: check

Our approach

From the first call to receiving the mortgage offer, it took only 23 days which is FPF’s absolute record (the average is about 100 days). The client was brilliant, the bank was efficient, and everyone pitched in and did the work!


How to Finance: €556,000 Mortgage in Mougins

valentin-b-kremer-1681580-unsplash

The profile

Buying in: Mougins
Property price:
€695,000
Amount: €556,000
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 2.45% fixed
Loan-to-value: 80%

The context

Singapore residents can generally obtain a max LTV of 60%. For this Partner of a top tier law firm, we increased the debt to purchase price ratio by showcasing his track record as an expat of a bespoke UK based LLP.

Our approach

Buying a property from abroad can seem lengthy and tiresome, particularly for busy professionals holding high level positions. However, our network can make it easy for you. It’s possible to do everything remotely, from applying for a loan to setting up a bank account and arranging a life insurance policy; FPF looks after everything until completion.

The client was very pleased with the ease of the process and introduced several friends and colleagues to FPF for advice.


How to Finance: €1,950,000 property in Grimaud

South of France

The Profile

Buying in: Grimaud, South of France
Property price:
€1,950,000
Mortgage amount: €1,365,000
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 1.70% fixed for the duration
Loan-to-value: 66%

The context

The client was buying in the south of France the house next to his family house. His profile was outstanding and his professional situation excellent. All the lights were green for an 80% Loan to value.

But there it is. It is not called loan to value for no reason. The survey from the bank came back lower than the purchase price for 2 reasons:

  • French banks are very conservative and risk averse. Should there be a default in the mortgage payment, the bank seizes the property and has to sell it to repay the mortgage. However, they take into account the location and the possible demand there would be and what price would allow a quick sale (within a month) which means the price would need to be dropped.
  • The renovation works to be made in the house were not adding as much in value as they were costing as they were mainly decoration work.

Overall, the bank decided to reduce their loan to value to 70% to limit their exposure based on the value that came back from their expert.

Our approach

Obviously, it came back as a shock to both us and the client. As mentioned above, the financial situation of the client was great so adding more deposit was officially not an issue. However it meant liquidating some assets and it created a bit of disbelief between the client and the bank.

In order to still provide the best possible deal for the client, we lifted our shirt sleeves and got to work. We managed to reduce the bank fees by 3 times and lower the rate of the mortgage from 2% to 1.7% on 20 years. For a mortgage of 1.365,000 €, that is a save of about 10,000 € on the bank fees and 46,000 € on the interest .


How to Finance: €2,861,600 mortgage in Paris

anthony-delanoix-152873-unsplash

The Profile

Buying in: Paris 8ème
Property price:
 €3,557,000
Mortgage amount: €2,861,600
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 2.54% fixed
Loan-to-value: 80%

The Context

Our client had a very good profile. However it was a bit difficult because he had withdrawn less funds from his Self-Employed activity than he had the previous years.

French mortgages are calculated on a DEBT TO INCOME ratio which generally cannot exceed 30-33%. That means that the total of your monthly commitments (personal loans, car loans, student loans, mortgages or rent) cannot exceed more than 30-33% of your monthly income.

Our client’s debt ratio actually reached 40%.

Our Approach

Thanks to our panel of banks, we managed to get THE French bank that would allow a debt ratio to exceed the 33% limit and go up to 45% depending on the profile, all this without requiring Assets Under Management (or collateral). The client ended up with a 80% loan to value mortgage (2,861,600 €) for a fixed rate of 2.54% on a repayment basis over 20 years.

Cerise sur le gâteau, we negotiated the bank fees to… 0€!


How to Finance: €659,400 mortgage in Courchevel

Courchevel

The Profile

Buying in: Courchevel, French Alps
Property price:
 €952,000
Mortgage amount: €659,400
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 2.15% fixed
Loan-to-value: 70%

The Context

Our client was a non-French resident living in London and buying a Residence de Tourisme in Courchevel.

Financing a residence de Tourisme can be harder than a normal freehold property with some banks refusing to finance this type of property because of the obligation to rent your property out a few weeks a year for many years (depending on the contract).

The client originally wanted an interest only mortgage so the rent could cover the mortgage repayment. However, Interest Only mortgages are not always available for the Residence de Tourisme developments, which was the case here. In addition, the client wanted to buy the property through a company to maximise his tax efficiency.

Our Approach

The client had to choose between a LTV of 70% over 20 years or 80% over 15 years. As he originally wanted a small repayment so that the rent could cover the payments,  it was a no brainer to pick the deal at 70% over 20 years (the rates were identical).


How to Finance: €510,000 property in Paris

paris

The Profile

Buying in: paris 11ème
Property price:
€510,000
Mortgage amount: €408,000
Mortgage type: Repayment
Mortgage term: 15 years
Interest rate: 1.80% fixed for the duration
Loan-to-value: 80%

The Context

The client wanted the highest LTV possible at the best possible rate as she was limited with her personal contribution since she had just paid off the mortgage on another secondary residence.      

The bank accepted to tick all of her boxes,  however it did  not accept to finance the real estate agents fees. These must be paid from the client’s personal funds.     

Our Approach

In order to reduce the deposit at its maximum, we asked the real estate agent and the vendor if we could re-write the compromis de vente and add the real estate agent fees to the purchase price. Though it increases a little bit the notary fees / mortgage tax and the amount of interest paid over 15 years (by a few thousands), it allowed the client to keep about 20,000 € of her personal funds at the moment of the purchase, funds she could allocate to actually decorate the property.

The client was very pleased by the solution as we answered her short term issue. The extra interest paid could be solved by repaying the mortgage early later on.