French mortgage
DISCOVER THE ADVANTAGES OF BUYING YOUR PARIS PROPERTY WITH A FRENCH MORTGAGE
Paris Buyer's in house French mortgage and insurance broker, France Home Finance, have been obtaining French mortgages and insurance for international clients since 2004 with a range of banks specialized in this type of lending.
Did you know that you don't need to be a French resident to borrow in France and there are many compelling reasons to consider it?
- Interest rates in France have historically been much lower than in non European Union countries. It's worth checking before you finance at home.
- Keep your cash at home to invest in a higher rate of return in another investment.
Limit currency exchange loss and risk
- Your French property will serve as security so you don't have to place a claim on the title of a property in your home country.
- Avoid currency exchange loss from transferring your home currency to pay for your purchase. Depending on your situation, it could make sense to borrow the maximum possible in euros then wait for a strong home currency to pay down the mortgage.
- Match your debt payment currency in euros to the rental income in euros you will receive if you plan to rent your Parisian apartment.
- Avoid a currency mismatch. If you borrow at home in dollars for example to buy Paris real estate and the dollar happens to be low compared to the euro at the moment you need to sell, you will lose money when you transfer funds back home.
Tax advantages
- Interest paid on your French mortgage will reduce the taxable rental income from your Parisian apartment.
- Reduce your exposure to the annual property wealth tax in France (IFI.) This tax is charged on properties valued over 1.3 million €, net of any French debt, and is due whether you are a French resident or not.
What are the conditions to borrow in France?
- French banks will lend up to 85% of property list price under certain conditions while most international buyers obtain from 50 to 80% financing.
- Interest rates are fixed for the entire duration.
- French life insurance is required to cover your French mortgage.
- You will need to open a French bank account from which your mortgage payments will be debited.
REQUEST YOUR FREE FRENCH MORTGAGE CONSULTATION
FINANCE YOUR PARIS APARTMENT IN 6 EAST STEPS WITH FRANCE HOME FINANCE
1. Get pre-approved to borrow in France
French banks have a very different approach to underwriting compared to other countries therefore it is necessary to understand your complete financial situation to give you an accurate analysis and know which banks to quote. Based on the property you have chosen and your personal financial situation, our French mortgage brokers will help you choose among all the options to find the most advantageous product for you.
2. Send your French mortgage application file
Your dedicated mortgage broker will send you a list of documents needed to apply for your French mortgage with a secure link for uploading. You will also need to complete a medical questionnaire to apply for the required life insurance for the mortgage. For large mortgages, you may need to complete a medical interview with a doctor, take a blood test or an electro-cardiogram. Specialized insurance medical centers in Paris offer appointments at no charge to you. It is also possible to complete the tests in your home country.
3. Open a French bank account
You are required to have a French bank account from which the lender can automatically debit your mortgage payments. If you do not already have one, your French mortgage broker will help you set one up. This can be done from abroad without meeting the French bank in person. In most cases, you will be asked to provide copies of your identity documents like a passport or driver's license and an original home utility bill to justify your primary residence.
4. Accept your French mortgage and life insurance offer
France Home Finance will be in close contact with the mortgage banks to ensure you receive the best possible terms and conditions. Once the bank has studied your file and is ready to tender your offer, the mortgage offer is sent to you and to your notaire. Consumer protection law states that you must wait a minimum of 11 days before accepting the proposed mortgage. French mortgage offers are usually valid for 30 days after reception. Once you have accepted the mortgage, you typically have 4 months to complete the sale. In most cases, the French life insurance is sent with the mortgage offer and also needs to be signed and returned.
5. Obtain French property insurance
When purchasing existing French property, you must insure your home against damage and loss with an effective date before or on the day of the signature of the act of sale or the French notaire can refuse to complete the transaction. Our brokers are France Home Finance will discuss your planned usage and contents value in order to provide an insurance quote and help you put in place a policy that best covers your needs.
6. Complete the act of sale
You can either travel to France to complete the act of sale in your French notaire's office or you can sign a power of attorney to allow your French notaire to sign for you. In either case, your notaire will send a financial breakdown to you in advance detailing the property price, your reservation deposit paid, the mortgage amount, your down payment and a breakdown of the legal fees. You are required to send the balance of funds due to your notaire by wire transfer before the signing can take place. The French notaire will call for the remaining balance due directly from your French mortgage bank and will then be ready to complete the transaction.
75004 Paris