French Mortgages
Once they decide to buy a property in France the first question that most people ask themselves is “Does the house come before the mortgage or does the mortgage come before the house”? Should they find their dream home and then try and arrange a mortgage and risk being disappointed or should they try and arrange a mortgage on a property they haven’t yet found and then search for a property, mortgage in hand? Also, the French legal law means that most banks’ underwriters will not give an approval until there is a “Compromis” or Reservation contract signed.
In practice neither approach is very satisfactory. Finding the house first makes it very much easier to fill in the mortgage forms but if you then can’t find a mortgage the disappointment would be considerable. CAFPI mortgage brokers has partnerships with the largest number of banks, so therefore the best choice.
CAFPI will issue you with a approval in principle, this will enable you to be confident that when you find your dream home, provided it is broadly as described in your application, we will be able to obtain the mortgage you need. You will be clear as to exactly how much you can afford to pay for your French property and what the loan monthly repayments will be.
New builds
CAFPI options means that if you wish you do not have to pay anything until the construction is completed or the improvements are completed
You can also buy the land and then obtain a mortgage for the construction once you have decided on you perfect new home.
French Mortgages Options
In France, mortgages are similar to those you might be used to back home but they do have some important differences. The options for interest-only loans are very small, but part interest-only and part capital repayment are more common and offered by specialist banks. With the recent climate, the banks have come up with some interesting solutions special mortgages such as borrowing 100% in Euro while keeping your savings in pounds or dollars.
Fixed or Variable rate
Firstly, you can opt for a fixed or variable rate for the whole of the mortgage’s term, a fixed rate is very common in France and nearly 80% of all mortgages are on fixed rates as the French prefer the security. Certainly the variable rate may be lower but as we all know interest rates go up and down over time and a 25 year mortgage with a fixed rate at 4,5% may well be a better investment than a mortgage with a current variable rate of around 3.5% but which might rise appreciably over the next 25 years.
Legal Cover
Finally, it is a French legal requirement that all mortgages are protected by a mortgage protection policy and our job is to find the best mortgage for you.
So whatever your need it is much better to talk to a specialist who knows all the options available and at which rates, so fill in a form or contact our senior specialist Jonathan at j.woodcock@cafpi.fr.
If you would like further information – please fill out the short form below, and we will be in touch with you to discuss your requirements…
