• Buying in: Meribel
• Property price: €990,000
• Loan Amount: €841,500
• Mortgage Type: repayment
• Interest Rate: 2.35% Fixed
• LTV: 85% 

The background

A CEO of a fast-growing startup company has contacted us to ask for help organising a French mortgage. He has found a property in Meribel with a vast amount of constructible land. 

Our approach:

Upon receipt of the application form it transpired that the original purchase price and consequently the mortgage amount were outside of the client’s capacity to borrow due to insufficient deposit. As a result, we have recommended the client to negotiate the price or postpone the purchase for a few months to build up his savings. 

After a couple of months, the client came back to us having negotiated the purchase price down. This meant that the client had just enough savings to buy the property. However, some of the funds would come from his family members in the form of a gift. In general, this is not a great position to be in because the lenders want to see that not only do you have enough cash for a deposit and the fees, but also money left over after the transaction for a “rainy day”. 

In most cases, lenders would refuse the file. However, we have prepared the application in a way that explained what were the reasons behind the client having “only” enough savings to cover the transaction. Gifts from family members are usually accepted as long as they do not represent a significant percentage of the deposit. 

One of the big factors that we have underlined when presenting the file to the lender was the fact that our client has repaid a mortgage on his main residence in the UK within 7 years of purchase. This could explain the reason why he wasn’t able to save a lot of money in recent years. Moreover, he has 1 buy-to-let property that has less than a year to run on a lease upon which he is inclined to sell the property. Lastly, he had a number of shares tied up in the company that he works for, thus far exceeding the bank’s requirements for the “rainy day” fund. 

Having presented all the arguments to the lender, we have obtained a favourable decision. We could then proceed to sorting out a life insurance via a UK registered broker. Because of the complications with the deposit and negotiations around the purchase price, it took us more time to obtain the mortgage offer. However, both sides were happy to see the conclusion of this deal.