securing a mortgage in france as a non-resident
It’s hard not to daydream about having your own little slice of paradise in France, but are your daydreams being interrupted by questions of how to go about it?
One of the most common questions we get as buyer’s agents is, “Can I borrow money for a house in France as a non-resident?”
A lot of people assume this is where their dream might hit a stumbling block, but the answer is yes: you can borrow in France as a non-resident. Not only that, but it can be a relatively simple process provided you have the right team in place.
“Borrowing in France can be a relatively simple process provided you have the right team in place”
What is the borrowing process for non-residents?
French banks offer mortgages to international customers; however, to mitigate the risks of lending to non-residents, there are a few additional requirements you may need to meet.
These may include:
Having a savings account that you regularly make deposits into that holds at least two years of mortgage payments.
A life insurance policy that covers 120% of the mortgage and lists the lender as the beneficiary.
Proof of property insurance, health insurance, and possibly a medical assessment, depending on the borrower’s age.
The best way to be approved for a loan is through a French mortgage broker who works with multiple French banks, giving you the highest chance of being approved. Milieux Property can provide you with an English-speaking broker with extensive experience working with international buyers. This will be especially helpful if you’re self-employed or not a European Union resident. They can do the mortgage research on your behalf and find you the best deal possible, and also advise you on how to best fill out the application and prepare your documents so that you have the greatest chance of approval.
To obtain an official mortgage offer from a lender, you and the property seller will need a signed and completed sales agreement. You will need to prove to the bank that you can afford the loan and that the property's value supports the mortgage amount you are requesting.
After this, the underwriting stage will commence. Once complete, your mortgage offer will be issued with a 10-day cooling-off period, after which you can sign your agreement.
Once your notaire receives the funds from the lender, you will sign the final sales agreement, and the property is officially yours!
How much can I borrow in France?
With some of the lowest interest rates in Europe, you might find your budget going that little bit further in France.
As in most countries, the amount you can borrow depends on your income and existing expenses.
Some lenders may let you borrow 60% – 70% of the property’s value, depending on which country you are from.
You will need to prepare
Proof of employment and income, and three years’ worth of tax returns
Three months’ worth of bank statements for all bank accounts, and proof of assets
A copy of your passport and proof of residence from your home country
Your current mortgage or rental agreement
Marriage certificate, if applicable
Valuations for the property you wish to purchase, as well as quotes from professionals for properties that require renovation
Loan deed or title deed with a repayment schedule if the property will be financed with an equity release or remortgage
Preliminary sales agreement or property title for the building contract/plans, building license and the land if improvements will be constructed on the property
Sales agreement
Mortgage costs and fees
Interest rates on mortgages in France are still very low, and banks continue to push home loan lending to nationals, expats, and foreign investors. Currently, in France, interest rates are fixed for 20 years at around 3.7%, which is significantly lower than in the rest of Europe, the UK, the USA, and Australia.
As with all mortgages, there are administrative fees that you’ll need to consider. These can include:
Notary fees are approximately 8.3% for a used property and 3% to 5% for a new property
Setup fees, which are either a fixed amount or a percentage of the mortgage
The main takeaway is that you need the right team around you when entering the process of borrowing money in France. Milieux Property can arrange a great broker for you who will hold your hand throughout the entire process.
