Get a Mortgage in France
Who are the lenders?
Many lending institutions in France now specialize in mortgages designed specifically for non-residents. French Property Insider Consultants can assist you free of charge with applications to any of these six lenders: BPI, UCB-IB, Crédit Foncier, GE Money Bank, Barclays Bank and HSBC.
What qualifies you for a loan?
1. Income. Loans are income based. You may borrow up to 1/3 of your disposable income. Rental revenue may be considered as income. Consumer debt (credit card balances), taxes and insurance premiums are not deducted from disposable income. Car payments, other mortgages and other debts are deducted from disposable income.
2. Age.
The term of the mortgage may not exceed approximately 70 years of your age. This is directly tied to a mandatory life insurance policy which secures the loan.
Why is life insurance mandatory?
It is national law that requires all property to be secured by a life insurance policy so in the event of the borrower’s death, the property is free and clear for inheritance purposes.
What if I already hold a life insurance policy?
The policy must apply specifically to the mortgaged property. Normally, the policy is provided by the lender’s associated insurance company. The borrower must complete a medical questionnaire and often undergo an exam to qualify for the insurance and therefore the loan.
How much can I borrow?
Traditionally up to 80% of the purchase price of the property, sometimes up to 90%.
Will the mortgage cover Notaire fees?
No.
Will the mortgage cover agency fees?
Yes, as long as the fees are included in the purchase price of the property.
Will the mortgage cover renovation?
Yes, under conditions: the lender will provide up to 80% (or in some cases 90%) of the appraised value of the property including the renovation costs.
What types of loans are available?
1. Fixed rate 2. Variable 3. Interest Only 4. Combination Loans
Do all lenders offer the same products?
No, each lender offers a variety of different products.
What are the current interest rates?
Euribor plus margin, often 3-month or 12-month. The Euribor is the money market reference rates for the euro: http://www.euribor.org
Can I get pre-approved?
Lenders will accept applications prior to purchase of a property, but will provide a “pre-approval in principle” only, estimating the applicant’s borrowing power.
We highly recommend understanding your borrowing power BEFORE visiting properties which may not meet the lending capacity.
Who is held responsible for repayment?
Those on the title deed of the property are held responsible for repayment of the mortgage.
How do I may repayments?
Your payments will be automatically deducted from your French bank account.
Can I deduct the interest portion of the loan on my U.S. tax return?
Yes! We recommend you consult your accountant or tax attorney for advice.
How do I get started?
Contact French Property Loan: Info@AdrianLeeds.com
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