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
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.
The couple are company directors working in the construction sector, thus knowing the in-and-outs of building process. However, they were not aware of the differences in obtaining finance for newly built properties.
The clients looked for financing of the full acquisition price. The property will be let out during most of the winter and summer months, therefore, looking for a high mortgage amount will optimise their tax position in France. However, obtaining 100% LTV is only possible with lenders when you place 30% of cash on bank’s books. In this case, the couple preferred to invest the equity into the property instead.
We have tried to match our buyers with several high street French lenders to no avail. Due to the nature of their professional activity, banks were concerned about the fluctuations in the business cycle of their respective LTDs. Furthermore, the lenders either reached their limit of units to finance in the project, or didn’t want to finance the leaseback properties. As a result, we have advised our clients to hold off the purchase and build up some capital to strengthen their position. In the meantime, we used our resources on the ground in our Annecy office and went into the field to speak with small local lenders to find a suitable solution.
After almost a year of staying put, we have applied with a local lender with whom we built up a relationship. We have set up a presentation meeting between our representative and a bank’s analyst at their local branch and went through the file together. This personal approach allowed us to clear any ambiguities from the lender’s side and led to obtaining a joint-fastest mortgage offer in just 23 days.
Although the file was with us for almost a year, we have ensured that clients were affordable for property finance in France.