FISCUS MORTGAGES - INFORMATION AND ADVICE

Guide to purchasing a property in France

1) Please ensure that you will have full title to the property on completion and that the appropriate documents are available for the lender.

2) With new properties, find out the date the property will be registered in your name(s), as the lender cannot lend on the security of the property until it has been registered or if it is currently uninhabitable.

3) Please note, that the lenders will not advance funds to purchase or renovate properties that are currently uninhabitable.

4) Whilst all reasonable steps will be taken to secure the loan on your overseas property as soon as possible, delays may occur due to the French legal and administration system.

5) Check with the estate agent/lawyer that you are aware of the costs charged by the legal & government authorities for purchasing a French property, noting that the lender will have their own legal costs for assigning the loan (the cost of which they will normally advise when they issue the mortgage offer).

6) To avoid any problems with agents immobiliers or Notaires, it is strongly advised that you take the appropriate independent legal advice before signing the "promesse de vente". The bank will require a copy of this document to be forwarded with the relevant application form. However you are able to sign this contract with the clause “subject to mortgage finance” as the contract, once signed is legally binding.

7) Please be aware that the Notaire may be incorporating within his charges, costs for assigning the mortgage and you should establish with the Notaire the actual cost before proceeding with a loan application

8) It is advisable to arrange your mortgage finance before agreeing to purchase a property.

9) All mortgages have to have a suitable life assurance policy assigned to them. Some lenders offer a free life assurance on the first applicant.

10) Not all French lenders carry out valuations / surveys. You may wish to have one carried out independently.

11) Properties can be purchased either individually, in joint names or in the name of a civil real estate company – known as an SCI (Societe Civile Immobiliere) – under French civil law. For an SCI at least two people are required . For advice regarding whether to purchase under an SCI, independent legal advice should always be sought.

12) A French bank account will be required and the relevant RIB (relve d’identite bancaire) will be required before the release of funds.

How much can I borrow & what proof of income is required?

Please note, that there are no non-status/self-certification mortgage facilities available in France (although renting out your property is permitted), all loans need to be supported by a minimum requirement of proof of income, i.e. if employed - copies of your last three month's payslips & copies of your latest P60/Employer’s Reference together with copies of your last 6 month’s Personal Bank Statements will be required or alternatively if you are self-employed - copies of your last three years Audited Accounts & copies of both your last 12 month's Business and last 6 month’s Personal Bank Statements will be required on application.

Unfortunately in France the French Lenders will NOT take into consideration any proposed Rental Income from the property for mortgage purposes/repayments.

Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans, credit cards (if the balance is not cleared on a monthly basis) and any maintenance – ie: Divorce - payments together with your proposed French mortgage payments must not exceed 35% of your net monthly income.

Example:

Net joint monthly income £ 2,500 times 35% of that figure is £ 875 minus existing monthly mortgage payment £ 300 – No other liabilities. This leaves a balance of £ 575 for a proposed French Mortgage payment.