Data out this month suggests that the excellent French property buying conditions will continue well into 2011 and perhaps the next increases in rates will only come in 2014. Tracker mortgages now seem to be the flavour of the month after comments by the ITEM club (Independent Treasury Economic Model) and Jean Claude Trichet, the president of the European central bank, have led to analysts predicting that rate rises seem a way off yet.
Lending for house purchases as a whole was up 3.4% across the Eurozone in June with France doing particularly well according to European Central bank data. The latest report from the FNAIM for June also confirms this for France as French property prices continue to remain stable with an increase of 0.6% in the last 3 months. French banks continue to lend at high levels of loan to value, up to 100% of the purchase price for a second home with some banks also including the purchase taxes in the loan for some property types.
French banks are keen to make the most of the historic interest rates, 1.75% for a 90% LTV tracker is the best we have seen for a second home purchase, but they are also cautious given the unusual economic conditions. What does this mean for your French mortgage application? Increased amounts of explanation required by the French bank and extra paper work required making for a longer application process. The high volume of clients now being scrutinised to a new level means that many banks are struggling to maintain their service levels. Add in the summer vacation season and we have a recipe for frustration, especially for those seeking a loan quickly.
If you are in a hurry to obtain a loan then make sure you gather all of the documentation together quickly and accurately and perhaps write a summary letter outlining your financial situation and how you manage your bank accounts. This will help your broker to quickly get up t speed with the best offers, perhaps running your situation passed a few banks to see which ones can make an offer in the shortest time. Mortgage offers can still be obtained quickly but extra diligence is required pre application to ensure that the application can go through smoothly. A good French mortgage broker is vital to getting the application quickly through the new checks.