Mortgages

Why take out a mortgage in France when I can go to my local bank back home?

The majority of people purchasing a property in France need financing in order to buy and they might ask themselves this very question. There are several answers to this, and they apply to people according to their situation. The fact remains that almost every house purchase in France by a non-French individual is done with a mortgage. These are the main reasons for taking out a mortgage in France on a French property:

• The French inheritance tax is high, 26% of the property value, but if you have a mortgage on your property through a French bank of let us say 80% of the value the tax will only apply to the remaining 20% of the value, your capital.
• If your property is bought for more than €720.000 you will be allegeable to pay wealth tax of 0.55% per annum. The tax percentage increases with the value of the property: €720.000 to €1.160.000 gives 0.55% tax, €1.160.000 to €2.300.000 gives 0.75%, €2.300.000 to €3.600.000 gives 1.0%, €3.600.000 to €6.900.000 gives 1.3%, €6.900.000 to €15.000.000 gives 1.65% and over €15.000.000 is caped on 1.8%.
• By taking out a mortgage in France you will lower the net capital you have available to be taxed, i.e. a property of €1.000.000 with 70% mortgage saves you a tax bill of €5.500 per annum.
• Pay down on a EURO mortgage, as your expenses and rental income will be in EUROS.
• The interest rates here in France might not always be lower than what your bank back home can offer, but it is more stabile over time. Just as your property purchase is an investment over time you should look at the mortgage the same way.

How does a French mortgage work?

There are a few regulations in the French banking system that might be quite different to those you are accustomed to when dealing with your local home bank. Here are some of the ground rules you need to be familiar with before applying for a French mortgage:

• Maximum duration of 25 years
• Security only taken out on the property in France
• Personal income and savings lays the foundation for the mortgage
• All nationalities are welcome, but the % borrowed might be capped differently
• Maximum percent is 85% of the purchasing, the norm is between 70% and 80%
• Companies registrated outside France can not get a mortgage
• Your debt ratio can not exceed 33% of your net income (however this rule is changing, so we can now offer a debt ratio of as much as 45% on the second period of an interest only mortgage)

What do I do now? Three easy steps to financing your property

1. Use the mortgage machine, or request a callback to discuss your mortgage requirements.
   
   
2. Having found the best mortgage for you, we arrange for the bank to call you at a time of your convenience.
   
   
3. The bank pays FinanceInFrance a commission, which we share with you.
   
   

To make your mortgage application process in France as simple and efficient as possible, Finance In UK has developed the Mortgage Machine, enabling you to calculate your mortgage in just a few mouse clicks. The mortgage machine uses the latest rules and calculations of all the mortgage products from the leading French banks.

Taking out a mortgage through a French bank need not be complicated: even the documentation is now available in English. As long as you remember this: the bank in France has never met you before, so they will be asking for documentation and even medical exams to make sure you qualify for the mortgage. Non-French mortgage applicants usually find the process is less than straightforward when compared to deadling with their home bank!

Lets get started, click here to go to the Mortgage Machine.