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Unless you have considerable funds available to you, funding a purchase is a question of getting a mortgage. You can do this either in France or in the UK.
In many ways it is easier to keep your loan on the UK side of the Channel - either by extending an existing mortgage or by taking out a new one. The Pound is strong against the Euro and several UK banks offer mortgages for overseas property purchases. They may take existing equity into consideration, which a French bank won't (unless it's in France) but their criteria may be more stringent than the French banks and their rates not as competitive.
There are considerable long-term benefits to having a French mortgage and French bank account for a French property purchase, and most buyers choose this option. French mortgage rates are now very competitive and many banks / lenders look very favourably on overseas purchasers. Most banks will lend you a sum whereby the repayments are up to one third of your monthly income. Some will consider a term of up to 25 years, although the standard is 15. Most banks will expect you to make a personal contribution of 20-30% of the purchase price. However, if this is unrealistic, it may be possible to secure a seperate loan to cover this cost.
We have plenty of experience dealing with both French and English mortgages, and we will be happy to discuss the various options with you before you decide which direction to take. We have an excellent network of mortgage providers who offer very competive packages, and which we will research and set up on your behalf.
The Purchase process:
The Offer:
Once you have decided to buy a property, you make an offer. At this point the owner cannot accept offers from any other party until he has finished negotiating with you - one way or another. Therefore there is no such thing as 'gazumping' in France.
The Compromis de Vente:
This is a legally binding agreement which is signed by both parties once an offer has been accepted. In it you agree to pay 10% of the sale price within a week of signing – and the vendor is legally bound to sell you the property. At this point, you are committed to the purchase, and you have a 6 week period to secure your finance for the purchase. A standard 'compromis de vente' is designed to protect both parties and includes a clause which states that you will get your 10% back in the event that you cannot secure a loan.
Notaire’s fees:
A notaire is the equivalent of a UK solicitor, someone who oversees and handles the legal side of the sale. They are obligatory, and expensive – taking generally 7% of the sale price. It is common in the case of straightforward sales for the buyer and seller to use the same notaire. However in the case of possible complications (eg land access rights), it makes sense for the buyer and seller to use different companies to be sure that your notaire is working in your best interests.
Estate agents fees:
The estate agents fee is built into the sale price of the property, and is normally 6-9% of the sale value.
The mortgage:
Once you have signed the compromis de Vente, you have 6 weeks in which to secure a loan. This normally take 3-4 weeks to process so researching and acting quickly is important. We are ideally placed to do this for you and can work on your behalf by email, phone and fax, to secure the best loan for you. Most French mortgage providers charge around 500-800 euros to set up your loan.
The sale document:
The notaire handles all of the sale process and puts together the deeds, which normally takes 3 months from when you first sign the compromis de vente. Once your loan is secured, he will make sure that the financial transactions take place between the buyer and seller. You do not have to be present when the act is signed as you can assign proxy (someone else to sign on your behalf).
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