John Busby at French Private Finance addresses two of our most common questions about getting a mortgage in France…
Q. I hope to purchase a property in France next year with a French mortgage, and wondered whether this might be difficult as I am self-employed? What would I have to provide in terms of proof of income? I also intend to take on a renovation project, so would I be able to obtain finance for the work required?
A. There are generally no issues for self-employed borrowers financing a French property. You simply need to be able to provide proof of income in the form of three years’ tax returns. How much you can borrow will be based on your average earnings across that period. You can add renovation costs to the purchase price and still achieve up to 85% of the combined amount, as long as you can supply quotes for the renovation works from approved, insured providers.
It is also important to consider ‘rainy day’ funds. Just like in the UK there are additional buying costs on top of the deposit capital you are putting into the property and French banks will want you to demonstrate that you have a buffer. This is so that should anything unexpected happen the bank knows that you have the means to handle it. They expect to see this for all property types, but with renovations and period properties they may expect you to have a stronger position.
Q. I haven’t decided whether I’m going to sell the property afterwards or rent it out, but are buy-to-let mortgages available in France as they are in the UK?
A. Technically there is no such thing as a buy to let mortgage in France as the same mortgage products are used for both second homes and investment properties. French banks will always look at your ability to generate rental income even if you are only borrowing a very small percentage of the purchase price.
If you want rental income to be factored in to your mortgage offer, you will need to provide projected rental returns which can be sourced from a credible tour operator, management company or local lettings agent. If the property is located in an area which is popular with international or domestic tourism it will be easier for you to demonstrate the potential income. With new-build properties developers will have already sourced this information before they release the properties on to the market