How to refinance your home loan in France?

Posted on 08 Jul 2020 in Market
How to refinance your home loan in France?

1 – Refinancing: How does it work?

Thinking of changing your mortgage in France to benefit from lower rates? When interest rates fall, it can become interesting to renegotiate a mortgage (mainly repayment mortgages) or have it repurchased by another lender to obtain a better rate.

Refinancing, what are concretely the potential benefits?

  • – reduced monthly repayments and/or
  • – a reduction in the repayment period.
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Latest transaction: €680,000 Loan for a property in Les Gets, French Alps

Posted on 24 Jun 2020 in Transactions
Latest transaction: €680,000 Loan for a property in Les Gets, French Alps

Buying in: Les Gets
Property price:
 €850,000
Mortgage amount: €680,000
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 1.80% Fixed
Loan-to-value: 80%

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Mortgages options in France

Posted on 17 Jun 2020 in French Private Finance
Mortgages options in France

There are about 5 different mortgage options in France. Each has its own advantages and inconveniences but you will definitely be able to find the solution that suits you best and match your financial needs / projects. Which one is for you?

The Classic French Mortgage: Lock in long term value

The standard mortgage option in France is repayment. You pay both principal and interest which means that the loan will be repaid in full by the end of the term (should you keep up with the repayments).

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Latest transaction: €500,000 Loan for a property in St Martin de Belleville, French Alps

Posted on 10 Jun 2020 in Transactions
Latest transaction: €500,000 Loan for a property in St Martin de Belleville, French Alps

Buying in: St Martin de Belleville
Property price:
 €1,100,000
Mortgage amount: €500,000
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 1.50% Fixed
Loan-to-value: 45%

The background

Our British client is a Hong Kong resident. Renting in Hong Kong is very expensive and it was difficult to fit within the debt to income ratio limit allowed by the French banks (your outgoings cannot exceed 33% of your income).

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After Covid-19, how has the French mortgage landscape changed?

Posted on 03 Jun 2020 in Market
After Covid-19, how has the French mortgage landscape changed?

1 – Overview of the situation

Late 2019 and early 2020 saw French mortgage rates reach all time lows. During that time, we managed to secure a 20-year repayment mortgage with a fixed rate of 1.08% in the French Riviera, a 20-year repayment mortgage with a fixed rate of 1.20% in Paris and a 20-year repayment mortgage with a fixed rate of 1.35% in the French Alps.

The Brexit environment had spooked the French banks a little bit but that did not stop the take up of new loans.

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Latest transaction: €190,800 loan for a property in Cieurac

Posted on 20 May 2020 in Transactions
Latest transaction: €190,800 loan for a property in Cieurac

Buying in: Cieurac
Property price:
 €254,400
Mortgage amount: €190,800
Mortgage type: Interest Only
Mortgage term: 14 years
Interest rate: 2.45% Fixed
Loan-to-value: 75%

The background:

Our clients were a mixed couple (British / French) and the husband wanted to buy a second home in his wife’s hometown in the Lot department (South West of France). 

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The French mortgage application process | part 2

Posted on 18 May 2020 in French Private Finance
The French mortgage application process | part 2

1 – FIXED OR VARIABLE RATE?

Fixed rates

The majority of loans in France for French property utilise a fixed rate for the term. Fixed rates are available over 10, 15, 20 and even 25 years. The rate is fixed for the entire duration of the mortgage. This offers a high level of certainty as to the monthly payment. 

Variable rates

The majority of French variable mortgages are capped,

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Latest transaction: €701,750 loan for a property in Courchevel

Posted on 13 May 2020 in Transactions
Latest transaction: €701,750 loan for a property in Courchevel

Buying in: Courchevel, French Alps.
Property price:
 €1,002,500
Mortgage amount: €701,750
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 1.65% Fixed
Loan-to-value: 70%

The Background

When running a ltd company, French banks will look at your salary & dividends for the past 3 years to assess affordability. This can prove difficult for business owners who tend to pay themselves just what they need.

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Should you purchase your French property through a SARL (LLC) ?

Posted on 01 May 2020 in Market
Should you purchase your French property through a SARL (LLC) ?

An SARL is a limited liability company and one of the most common types of business in France and very popular with Foreign residents buying in France.

This type of company must be composed of two or more partners or you can create an EURL (single-member company with limited liability) if you want to set up a company by yourself. There is also a Family SARL which allows you to make an SARL with direct family members.

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Latest transaction: €714,480 loan for a property in La Plagne.

Posted on 22 Apr 2020 in Transactions
Latest transaction: €714,480 loan for a property in La Plagne.

Buying in: La Plagne, French Alps.
Property price:
 €1,099,200
Mortgage amount: €714,480
Mortgage type: Repayment
Mortgage term: 15 years
Interest rate: 1.55% Fixed
Loan-to-value: 65%

The Background

The client is a successful and experienced business owner. One of the criteria was to respect the maximum age to repay the mortgage while providing one of the best rates on the market.

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The French mortgage application process

Posted on 20 Apr 2020 in French Private Finance
The French mortgage application process

1 – OVERVIEW AND COMMON ADVICES

Contrary to common belief, getting a mortgage in France is relatively simple. The only thing that can surprise some property buyers is the amount of documentation required to complete the application process. With the assistance of an experienced French mortgage broker, you can use their knowledge and connections to achieve a smooth and positive result. You may need to travel to France to open a bank account at the branch.

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Latest transaction: €259,000 Loan for a property in Chatel.

Posted on 08 Apr 2020 in Transactions
Latest transaction: €259,000 Loan for a property in Chatel.

Buying in: Chatel, French Alps.
Property price:
 €375,000
Mortgage amount: €259,000
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 2.30% Fixed
Loan-to-value: 70%

The background:

Our clients have been looking to purchase a property in the little known Alpine village of Chatel, Northern Alps. They have visited the region during the winter 2017/18 before finally setting their sights on a new development near the village centre. 

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Winter activities in the Alps | Part 2

Posted on 06 Apr 2020 in Lifestyle
Winter activities in the Alps | Part 2

1 – Indoor activities

Courchevel – Aquatic centre (Aquamotion):

  • From 13€ a day
  • A large number of activities
  • Open all year round

The Aquamotion swimming pool in Courchevel has many recreational facilities such as : pools, spa and fitness areas, climbing wall, diving pit and surf wave.

Chamonix – Alpine museum:

  • From 4€, free for -18
  • Located In the former luxury hotel “Chamonix Palace”,
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Latest transaction: €1,800,000 Loan for a property in Megeve

Posted on 18 Mar 2020 in Transactions
Latest transaction: €1,800,000 Loan for a property in Megeve

Buying in: Megeve, French Alps.
Property price:
 €2,799,000
Mortgage amount: €1,800,000
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 1.35% Fixed
Loan-to-value: 65%

The background:

The client is a British citizen living in Singapore working for a major corporation focused on the grain and agricultural commodities. He was very interested in an off-plan apartment in Megeve,

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How do French lenders calculate your maximum mortgage amount?

Posted on 16 Mar 2020 in Market
How do French lenders calculate your maximum mortgage amount?

1 – How to easily calculate a rough budget?

To evaluate you maximum mortgage amount for a repayment product, simply follow this formula:

Here is the best way to see quickly if your real estate project is achievable. Have also in mind that the result is just an estimation, for a more precise result, we recommend you to use our mortgage calculator which can be found here. Moreover, French banks require at least 15%-20% deposit for non-residents,

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Latest transaction: €150,500 Loan for a property in St Gervais Les Bains

Posted on 04 Mar 2020 in Transactions
Latest transaction: €150,500 Loan for a property in St Gervais Les Bains

Buying in: St Gervais, French Alps.
Property price:
 €215,000
Mortgage amount: €150,500
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 1.45% Fixed
Loan-to-value: 70%

The background:

One of our real estate partners contacted us to introduce an australian client who has been struggling to secure a loan on a small holiday apartment in the beautiful village of St Gervais.

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Winter activities in the Alps

Posted on 02 Mar 2020 in Lifestyle
Winter activities in the Alps

1 – Outdoor activities: Our favorite ski places!

France undoubtedly has some of the best ski resorts in the world. It has a total of more than 200 stations, mainly located in the Alps and the Pyrenees. The Winter Olympic Games have also taken place several times in France: in 1992 in Albertville, in 1968 in Grenoble and, for the very first time, in 1924 in Chamonix.

We find in the French Alps the largest ski areas in the world!

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Latest transaction: €1,350,000 Loan for a property in Courchevel

Posted on 19 Feb 2020 in Transactions
Latest transaction: €1,350,000 Loan for a property in Courchevel

Buying in: Courchevel, French Alps.
Property price:
 €1,550,000
Mortgage amount: €1,350,000
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 1.35% Fixed
Loan-to-value: 87%

The Background

The client is a British couple living in Dubai working for a top lawyer firm and a top bank. They had found an apartment in Courchevel,

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What data do french lenders use to build your application?

Posted on 17 Feb 2020 in French Private Finance
What data do french lenders use to build your application?

1 – From marital status to age… French lenders will have a look at everything

The first aim of the bank is to determine if you meet the requirements for your real estate project. Lenders will want to know more about your personal situation (marital status, age, health…) and about the property you wish to purchase (price, plan…).

Even if you want to obtain a mortgage alone, in France most banks will require the same details concerning your spouse (if applicable).

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Latest transaction: €504,000 Loan for a property in Grimaud

Posted on 05 Feb 2020 in Transactions
Latest transaction: €504,000 Loan for a property in Grimaud

Buying in: Grimaud, South of France.
Property price:
 €775,000
Mortgage amount: €504,000
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 2.00% Fixed
Loan-to-value: 65%

The Background

Despite having a very strong income and the required deposit, it was difficult to find a lender to finance the project of our client.

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Why would you create an SCI for your real estate purchase in France?

Posted on 03 Feb 2020 in French Private Finance
Why would you create an SCI for your real estate purchase in France?

An SCI, or “Société Civil Immobilière”, is a company that allows a number of individuals to share one or more real estate entities. The partners of the SCI can make contributions ‘in kind’; movable or immovable property that they already possess. These contributions, most often in kind or in cash, give entitlement to shares in the SCI  based on the total capital to partners share accordingly the profits and losses of the company.

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Latest transaction: €359,800 Loan for a property close to Carcassonne

Posted on 22 Jan 2020 in Transactions
Latest transaction: €359,800 Loan for a property close to Carcassonne

Buying in: Alaigne, South of France.
Property price:
 €514,000
Mortgage amount: €359,800
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 1.75% Fixed
Loan-to-value: 70%

The Background

One key element we keep referring to in the transaction of the month series is timing. Buyers tend to widely underestimate how long it takes to arrange a mortgage.

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What are the market conditions to obtain a mortgage in France?

Posted on 20 Jan 2020 in Market
What are the market conditions to obtain a mortgage in France?

1 – Overview of the situation

There has never been a better time to get a mortgage in France. Rates are currently just above their all-time lows, and this is for a number of reasons. The Tec 10 index, which gives a  view on how much the French government pays to borrow money over 10 years in France, fell this summer (2019) to its lowest ever level. As a result,

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Latest transaction: €2,800,000 property in Méribel

Posted on 08 Jan 2020 in Transactions
Latest transaction: €2,800,000 property in Méribel

Buying in: Méribel, French Alps.
Property price:
 €2,800,000
Mortgage amount: €1,400,000
Mortgage type: Interest Only
Mortgage term: 14 years
Interest rate: 2.20% variable
Loan-to-value: 52%

The Background

This borrower’s main requirement was the ability to pay off the mortgage in chunks without penalty. As a business owner, he also liked the idea of an interest only mortgage which gave him more freedom on his company drawings to lower his tax.

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Who is involved in your real estate purchase?

Posted on 06 Jan 2020 in Market
Who is involved in your real estate purchase?

The seller

A seller has a good to sell at a price determined by the market and a buyer who seeks a good to buy according to price and criteria. But how do you choose a selling price?

Purchasing through a mortgage, banks will check the real value of the property by ordering a valuation (sometimes to be paid by the buyer). The loan to value will be based on the valuation price rather than the purchase price so it will directly affect the mortgage amount sought after by the buyer.

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What is the new French property wealth tax (IFI)?

Posted on 23 Dec 2019 in Market
What is the new French property wealth tax (IFI)?

IFI? What is it?

Since January 1st 2018, the Solidarity Wealth Tax (ISF) has been abolished and a new tax, the Property Wealth Tax (IFI), has been created. The IFI concerns persons holding a net property portfolio of more than €1.3m.

Who has to pay?

In 2018, 132,722 taxpayers had to pay the IFI tax against 358,000 for the last year the ISF was in use. 46% of the revenue from the IFI tax come from the top 10% of taxpayers.

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Latest transaction: €1,018,500 Loan for a property in the Alps

Posted on 15 Dec 2019 in Transactions
Latest transaction: €1,018,500 Loan for a property in the Alps

Buying in: Les 3 Vallées, French Alps.
Property price:
 €1,455,000
Mortgage amount: €1,018,500
Mortgage type: Repayment
Mortgage term: 15 years
Interest rate: 1.55% fixed
Loan-to-value: 70%

The Background

The client heads a division of a major investment bank in London. The couple are British citizens and British residents. 

The clients were looking to invest in a holiday family house outside of the UK.

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Latest transaction: €401,250 Loan for a property in south of France

Posted on 05 Dec 2019 in Transactions
Latest transaction: €401,250 Loan for a property in south of France

Buying in: Le-Grau-du-Roi
Property price:
 €535,000
Mortgage amount: €401,250
Mortgage type: Interest Only
Mortgage term: 14 years
Interest rate: 2.05% variable
Loan-to-value: 75%

The Background

The couple already owned a few buy-to-let properties in the UK which they rent out. They were also accustomed to working with international agents and brokers as they own a couple of properties overseas.

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Latest transaction: €700,000 Loan for a property in Sainte-Maxime

Posted on 04 Nov 2019 in Transactions
Latest transaction: €700,000 Loan for a property in Sainte-Maxime

Buying in: Sainte-Maxime, South of France
Property price:
 €1,250,000
Mortgage amount: €700,000
Mortgage type: Interest Only
Mortgage term: 7 years
Interest rate: 2,45% fixed
Loan-to-value: 56%

The background

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

  • 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,

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Non-residents in France: who are they, where and what do they buy?

Posted on 24 Oct 2019 in Market
Non-residents in France: who are they, where and what do they buy?

In 2018, non-resident buyers represented 5.9% of real estate transactions for existing properties in France, but do they all buy in the same place? In today’s article, we will put international buyers under the microscope and examine where they come from and what they buy.

Unsurprisingly, British buyers account for 27% of all non-resident real estate transactions, followed by Belgian buyers who make up 19% of transactions. But who comes next?

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

Posted on 21 Oct 2019 in Transactions
Latest transaction: €408,000 Loan for a property in Paris.

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.      

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The main types of leases in France for real estate rentals

Posted on 11 Oct 2019 in Market
The main types of leases in France for real estate rentals

The empty rental lease

A property is considered empty when it is not sufficiently equipped “to allow the tenant to sleep, eat and live properly in the light of the demands of everyday life.” This essentially means that the property is unfurnished. 

The rental period of an unfurnished property is set six years. However, when the owner is an individual or a family SCI, the lease term is three years. The lease may be shorter (minimum 12 months) in the following instances: 

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Latest transaction: €659,400 Loan for a property in Courchevel.

Posted on 04 Oct 2019 in Transactions
Latest transaction: €659,400 Loan for a property in Courchevel.

Buying in: Courchevel, Alps
Property price:
 €942,500
Mortgage amount: €659,400
Mortgage type: Repayment
Mortgage term: 20 years
Interest rate: 1.80% fixed
Loan-to-value: 70%

The background

This client wanted to buy a new-build property in Courchevel which was part of a Residence de Tourisme development. Financing a Residence de Tourisme can be harder than a normal freehold property as some banks refuse to finance this type of property due to the enforced rental obligation.

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The Mobility Lease or the Solution to rent his apartment from 1 to 10 months in all legality!

Posted on 24 Sep 2019 in Market
The Mobility Lease or the Solution to rent his apartment from 1 to 10 months in all legality!

This article is presented by RentYourParis.com

When it was promulgated on November 2018, the ELAN law introduced a new type of lease to facilitate access for people on professional mobility: The Mobility Lease.

What are the specificities? How to set it up? We will explain everything to you.

The law defined the mobility lease as a short-term rental contract for a furnished rental granted to a lessee who, on the date the lease took effect,

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

Posted on 20 Sep 2019 in Transactions
Latest transaction: €5,280,000 Loan for a property in French Alps.

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.

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

Posted on 07 Sep 2019 in Transactions
Latest transaction: €940,800 Loan for a property in French Alps.

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. 

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

Posted on 27 Aug 2019 in Transactions
Latest transaction: €188,500 property in Joannas, Ardeche

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.

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Latest transaction: €285,000 Loan for a property in Cannes

Posted on 20 Aug 2019 in Transactions
Latest transaction: €285,000 Loan for a property in Cannes

Buying in: Cannes, Alpes-Maritimes
Property price:
 €450,000
Mortgage amount: €285,000
Mortgage type: Fixed Interest Only
Mortgage term: 7 years
Interest rate: 2.55% fixed
Loan-to-value: 60%

The context

This retired private equity investor was concerned about his ability to secure a mortgage with a French bank. As he had multiple income streams,

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Latest transaction: €390,000 property in the Var

Posted on 26 Jul 2019 in Transactions
Latest transaction: €390,000 property in the Var

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,

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

Posted on 26 Jul 2019 in Transactions
Latest transaction: €164,800 Loan for a property in Salies de Bearn.

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 city center.

seaside resort of Biarritz in the SW of France,

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Buying a property: cash vs. mortgage

Posted on 13 Jul 2019 in Market
Buying a property: cash vs. mortgage

From a young age, many of us are taught that debt is something to be avoided.  However, is purchasing a property in cash always a better option than borrowing the money from a bank? We take a look at the pros and cons of each in our latest blog post.

Pros for buying in cash

One of the biggest advantages of buying a property in cash is that the transaction process is much faster as there is no need to apply for a loan or mortgage.

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Everything you need to know about “notaires”

Posted on 10 Jul 2019 in Market
Everything you need to know about “notaires”

Without a true UK equivalent, it can be difficult to understand the role of the notaire. In our latest blog post, we take a look at what they do and demystify the costs involved.

What is a notaire and do I really need one?

When selling or buying property in France there needs to be an intermediary present who authenticates the transfer of ownership and reports it to the state.

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