As we hit the busy ski season and many property hunters look to evaluate their budget for buying that dream French ski property, here are five top French mortgage tips to consider when looking to acquire finance in the France.
1) Prepare to show ‘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. French banks will also want you to demonstrate that there is a buffer after this i.e. ‘rainy day’ funds, so that if anything unexpected happens the bank knows you have the means to handle it.
2) Understand eligibility criteria
French banks are keen to lend to foreign investors provided they meet the lending criteria. However French authorities do not have access to credit scoring data which means applications are assessed on proof of income. Three years tax returns and three months income is required for employed, with three years required for self-employed.
3) Get professional advice
One of the main reasons French mortgage rates are so low is that the banks are competing heavily for buyers. As a result, an international broker specialising in French mortgages for non-residents will be able to offer products which are better than if a buyer was to go direct, a no extra cost.
4) Be confident of rental returns
For leaseback properties and also standard buy-to-let properties, make sure you are confident of the returns, especially if you are factoring these into your mortgage payments. For leaseback properties, banks take the projected returns into account when considering the application, but you also need to be confident of the property’s ability to generate the rental income.
5) Understand the system
The French mortgage system is more regulated than in the UK, but this is what makes it so secure and is part of the reason why they can offer such low rates over such long terms. Of course, this can sometimes mean the application process takes a bit longer, but in the end it will be worth it.