• Buying in: Meribel
• Property price: €1,825,000
• Loan Amount: €1,250,000
• Mortgage Type: Amortising
• Mortgage Term: 20
• Interest Rate: 1.85%
• Loan-to-value: 70%

The background

The client came to us following a chat with the notaire on the low interest rate environment in France. As with many buyers, this wine importer was intending to buy the property cash before learning about the favourable loan terms in France. 

Our approach

We targeted a 70% LTV mortgage with a fixed rate of 1.55% pa. After we received positive feedback from the lender, the client had to pay for a valuation in order for the bank to confirm the loan amount. The value came back well under the asking price which came as a surprise since the Chalet was located by the pistes in a street where properties sold at much higher price per sqm.

Nevertheless, this was a showstopper for our first lender which meant that we needed to find an alternative solution. We went with a local bank in the alps with a higher interest rate but still attractive enough for the client to choose a mortgage over a cash purchase. 

While the credit committee of our new banking partner was quick to grant their approval, the vendors got impatient since the compromis was signed without a mortgage clause. In fact, the next step is to arrange a life insurance policy which is a long and rather daunting process that typically involves medical tests at that level of loan amount. 

Between the client travel commitments and the doctor not filling in the insurance forms properly, the signature of the deed of sale was pushed back by a month. This was followed by further delays on the lender side in issuing the loan offer since back offices are extremely busy given the current situation (COVID-19).