Mortgage Update: 12 Useful Things to Know about French Mortgages

Mortgage Update: 12 Useful Things to Know about French Mortgages
  1. The most common mortgage product in France (and the most easily obtainable) is a Capital Rayment mortgage.
  2. Interest-Only products are possible, but they are considered a tax planning product in France, therefore have very strict wealth and income tests.
  3. Equity Release is available in France, but there are conditions on how the equity can be used – typically only for renovations/improvements or investing in another property.
  4. Remortgaging products are available but limited; they can’t really be used to increase an existing mortgage. French lenders view mortgages as long-term products, they don’t expect homeowners to change every 5 years.
  5. Loan durations are typically from 6 to 30 years.
  6. Maximum Loan-to-Value is up to 75%-80% for EU nationals; up to 60% for US/Non-EU Nationals; 100% for French tax residents.
  7. All mortgage products require borrowers to pass very strict Debt-to-Income ratios.
  8. Mortgage protection life insurance is required for all products with an LTV over 50%.
  9. It can take as long as 12-14 weeks to process a mortgage application from initial enquiry to release of funds.
  10. Most non-residents have to borrow a minimum of €100k for the loan to be considered. Loans of anything less are extremely unlikely.
  11. It is worth investing the time upfront to make sure your finances are packaged together in the most attractive and transparent way for the French bank analysts and underwriters; you usually only get one short at the title and there is very little right to appeal!
  12. Using a broker can make the experience much smoother and more likely to go through…

Please get in touch if you have any questions about financing a property in France, and we’ll give you our no-nonsense view as longstanding experts in the French property market. Contact us: [email protected]

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