coin-gauche Financing an off-plan property in Francecoin-droit

Before going further, any potential buyer should take the following steps into consideration:

As soon as you will have found your dream property in France, you will have to make a deposit (2 or 5% of the purchase price) and sign what is called the “contrat préliminaire” (reservation contract). This contract aims to reserve and secure the property, and this property will then be taken off the market.

At this point, you should have already decided whether you are going to take out a mortgage, or if you will purchase cash – if you do decide to take out a mortgage, you should make the arrangements before signing the “contrat préliminaire”, and ask your bank to provide you with an agreement in principle (a mortgage promise).  Most promoters and estate agents will ask to see this document, as proof that you are credit worthy. This request is made in order to discourage people from beginning the purchasing process when they are actually not in a position to complete the sale. You will also be asked to write down your payment method in the “contrat préliminaire” (purchase with the help of a mortgage, or cash).

If you are taking a mortgage out, and you already got your agreement in principle from your bank, the mortgage must be arranged and agreed before you sign the "Acte de Vente" (final deed of Sale) at the notary's office. This act usually happens two to three months after you have given the deposit and signed your “contrat préliminaire”.

There are various options for obtaining the mortgage or funding that will finance your new purchase.

Mortgage through a French bank

When it comes to borrowing in another currency, some important points should be examined . No need to worry though, with the right advice, even the most inexperienced borrower can buy their  dream home easily..
French banks are often willing to lend at very attractive rates and terms.  -EU residents, can currently obtain a 15-year mortgage for 80% of the property value with a 3.60% interest rate (French residents can borrow up to 100% of the property value, whereas different rates apply for citizens of other countries outside of the EU .
Over the years, Sextant  have built strong relationships withthe banks in France who offer attractive interest rates:  for a Free Personalised Mortgage Quotation, click here
 
French mortgages are not based on the UK model of multiple incomes. Typically, the calculation works with the principle that the total of the French mortgage payment (plus any UK mortgage or rent, plus any other long-term borrowings) should not exceed a third of the buyer's gross monthly income.
The current process of applying for mortgages in France, again is not difficult, it usually takes at most 2 to 3 weeks, and even quicker sometimes.
In summary, obtaining a mortgage for a French property is relatively straightforward, especially with our help.
 

Money transfers

To help pay for your French property, a currency specialist like Foreign Currency Direct, offers an attractive alternative to dealing with your UK bank. They can appoint a Direct Debit which  automatically sends euros to your French bank account, so that every month you can relax, knowing that your transfers are taken good care of.

Foreign Currency Direct allows you to get better exchange rates than a high street bank and transfer fees can be  as low as £4. Compared with a normal bank, you can save a significant amount on transfer fees alone. Banks in the UK typically charge between £17-£40 for an international money transfer, so if you’re sending currency every month, you can easily save over £250 a year by using a foreign exchange specialist, on transfer fees alone.
 

Remortgaging

It is pretty common to remortgage in the UK, to raise money for a variety of purposes. However, this is not so common with French lenders, although some of them are starting to offer mortgages on this basis, allowing the borrower to take advantage of rising property values and equity. Notwithstanding, if you think that you will need additional funds later, it may then be a good idea to raise these funds at the time of purchase, when it is generally easier to obtain.
 

Opening a bank account in France

Opening a bank account in France is essential to pay the monthly instalments of your mortgage. In order to open an account in France, you just have to bring a few documents (copy of your passport, proof of address and bank statements), fill out an account application form and the bank will send you your account details with a RIB (Releve d'Identité Bancaire or bank account identity slip). It is that simple! To find out more about French Mortgage call us today on 020 7428 4910 or email us at mortgage@sextantproperties.com. We can assist you in arranging the finances to buy your dream property in France.

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Buying Process
Introduction
What is an Off Plan?
1- Property search
2- Financing
3- The purchase
4- Final signing
5- Champagne
Guarantees
Tips for investors
Legal process
French Taxes
After sales support