Have some put their main home at risk for the sake of their holiday home ?
The overseas holiday home market has seen many people purchasing their dream properties in countries all over the world.
Being so close, France has been, and still is, one of the top choices for holiday homes. The ferries and Channel Tunnel have made access easy, but the introduction of low cost airlines has made travelling to the more unspoilt parts of France an affordable reality. It is hardly surprising that thousands of holiday homes have been bought.
Figures show that in 2003, some 26,000 properties in France (not including Iles de France region) were bought by British or Irish buyers. Over 27,000 in 2004, whilst 2005 saw a small fall in numbers at 25,300, but 2006 saw the numbers rise to nearly 31,000.
How did these people buy their dream holiday homes?
Over the past four years the number of mortgages financed by French banks has risen, with many British and Irish people taking advantage of the lower interest rates, but even in 2006 French mortgages accounted for only 21% of those property transactions.
It is thought that approximately 50% of British buyers re-mortgaged their main home in UK to purchase their holiday home in France.
With the recent rises in UK interest rates, many people are now facing substantial increases in the cost of their monthly mortgage repayments, and the number of mortgages in arrears, or house re-possessions are on the increase.
At the end of June 2007, the number of mortgages in arrears had risen to an estimated 125,000, whilst the number of property re-possessions between January and June 2007 had risen to 14,000.
How many people have put their main home at risk by re-mortgaging their main home for the sake of buying a holiday home for cash, and what possible solutions are available to them?
One option would be to put the holiday home up for sale and hope for a quick sale, but that in itself can be a double edged sword.
According to a national group of French estate agents, property prices in France rose by an average of 2.8% in the first half of this year. However there are differences between the regions, and some regions are showing a fall in property prices.
For those people who may make a profit on the sale of their holiday home, there is the hazard of incurring the cost of Capital Gains Tax.
An alternative solution for some people, is the Euro Switch mortgage.
An Euro re-finance solution for those homeowners in France, who raised sterling mortgages on their UK property, giving them the advantage of benefiting from lower interest rates in the Euro zone, and also restoring the equity in their UK property. It is a way of using the French property as security and preserves their home country assets, matching liabilities and assets in the same currency.
Please contact me if you want to know more ....
Thursday, 23 August 2007
Wednesday, 11 July 2007
Old or New ?
Why is it the French seem to prefer new build or modern properties ?
Some 30 or 40 years ago they didn't seem to mind damp crumbling houses with creaking wooden shutters and leaking rooves.
Today is a different story altogether.
In the main, foreign buyers and the French are interested in different types of property.
To us foreigners, a unique property in a beautiful location is the dream, whilst what the French really want is comfort, elegance and convenience. The great majority of foreigners prefer to buy an older property and are prepared to put up with a few defects and more maintenance costs.
An average type of new property is more expensive than an old one. It is therefore important to consider whether you will be able to re-coup the cost of renovating an old property in a remote area. Selling on may be difficult, but you may be lucky to find another foreigner who wants to buy it.
Let's look at the advantages of an old property .....
Rustic, unique, and charming, with perhaps craftsman made doors and windows.
Lots of land and established gardens.
Probability of better views than a new property.
Potential for letting out occasionally for holiday rentals.
Now for the new ....
The building is guaranteed for 10 years from construction.
You can design the house yourself.
The heating will be more efficient, plus there will be insulation.
The kitchen and bathrooms will be more modern.
The wiring and plumbing won't need replacing.
Parking facilities.
Will you be buying old or new ?
Some 30 or 40 years ago they didn't seem to mind damp crumbling houses with creaking wooden shutters and leaking rooves.
Today is a different story altogether.
In the main, foreign buyers and the French are interested in different types of property.
To us foreigners, a unique property in a beautiful location is the dream, whilst what the French really want is comfort, elegance and convenience. The great majority of foreigners prefer to buy an older property and are prepared to put up with a few defects and more maintenance costs.
An average type of new property is more expensive than an old one. It is therefore important to consider whether you will be able to re-coup the cost of renovating an old property in a remote area. Selling on may be difficult, but you may be lucky to find another foreigner who wants to buy it.
Let's look at the advantages of an old property .....
Rustic, unique, and charming, with perhaps craftsman made doors and windows.
Lots of land and established gardens.
Probability of better views than a new property.
Potential for letting out occasionally for holiday rentals.
Now for the new ....
The building is guaranteed for 10 years from construction.
You can design the house yourself.
The heating will be more efficient, plus there will be insulation.
The kitchen and bathrooms will be more modern.
The wiring and plumbing won't need replacing.
Parking facilities.
Will you be buying old or new ?
Tuesday, 10 July 2007
What Will You Buy ... And Where ?
There are so many different types of properties for sale, and the prices vary enormously from region to region.
Would you prefer an apartment, a house, a villa, a chalet or perhaps a chateau ?
Where will it be ? On the coast, in the countryside, in the mountains, or maybe in a bustling city ?
One thing is for definite - there's an awful lot of property to choose from.
The secret of a happy house purchase is to stick within your budget, choose the right location, and find a property that is as near perfect as possible for your requirements.
Beware of the days of summer when everything shimmers in the sunshine - the outdoor life may look good, but what about the winter months ? Even in the Cote d'Azur it can be very cold.
Would you prefer an apartment, a house, a villa, a chalet or perhaps a chateau ?
Where will it be ? On the coast, in the countryside, in the mountains, or maybe in a bustling city ?
One thing is for definite - there's an awful lot of property to choose from.
The secret of a happy house purchase is to stick within your budget, choose the right location, and find a property that is as near perfect as possible for your requirements.
Beware of the days of summer when everything shimmers in the sunshine - the outdoor life may look good, but what about the winter months ? Even in the Cote d'Azur it can be very cold.
Wednesday, 27 June 2007
How Will You Buy ?
It sounds simple enough, doesn't it ?
But, oh no it's not ...... Once money is put into property in France, it can be difficult, if not impossible, to get your hands on some of that capital ..... Think Very Carefully.
There are three possible answers.
1 If you are fortunate to have the cash available to purchase the property, that is by far the easiest way. But problems can arise later ......
2 If you are a home owner in a country other than France, it may be possible to re-mortgage your main home to raise the cash to buy your French dream home. Again not so difficult, except that you may be putting your main home at risk for the sake of your holiday home, and problems can arise later ......
3 The third solution is to apply for a mortgage with a French bank. Of the three options, this is probably the most daunting ......
Which French bank do you choose? Which bank provides the most suitable mortgage for your requirements? Which bank offers the lowest interest rates and charges? Which bank is the best for its standard or service and staff that speak and understand your language? Don't forget, we're dealing with French banks - you wouldn't expect a UK or American bank to speak French.
Buying a property in France with a mortgage from a French bank gives you more control of your future finances. Think before you buy for cash. Once you have completed on the purchase of your property, you may be closing the door to any future financial help.
Did you know that ......
Unlike many other countres, equity release on property in France was impossible until some 2 years ago, and there are still many banks choosing not to involve themselves with it. Those that will offer equity release have some very strict criteria and conditions. Many people find that they do not qualify for an equity release mortgage.
Income and age are the main problem areas, although self-employed people can find it difficult too, as can those who have bought through an SCI (a French company for buying property), and the list doesn't stop there.
It pays off to think carefully about how to buy ....
But, oh no it's not ...... Once money is put into property in France, it can be difficult, if not impossible, to get your hands on some of that capital ..... Think Very Carefully.
There are three possible answers.
1 If you are fortunate to have the cash available to purchase the property, that is by far the easiest way. But problems can arise later ......
2 If you are a home owner in a country other than France, it may be possible to re-mortgage your main home to raise the cash to buy your French dream home. Again not so difficult, except that you may be putting your main home at risk for the sake of your holiday home, and problems can arise later ......
3 The third solution is to apply for a mortgage with a French bank. Of the three options, this is probably the most daunting ......
Which French bank do you choose? Which bank provides the most suitable mortgage for your requirements? Which bank offers the lowest interest rates and charges? Which bank is the best for its standard or service and staff that speak and understand your language? Don't forget, we're dealing with French banks - you wouldn't expect a UK or American bank to speak French.
Buying a property in France with a mortgage from a French bank gives you more control of your future finances. Think before you buy for cash. Once you have completed on the purchase of your property, you may be closing the door to any future financial help.
Did you know that ......
Unlike many other countres, equity release on property in France was impossible until some 2 years ago, and there are still many banks choosing not to involve themselves with it. Those that will offer equity release have some very strict criteria and conditions. Many people find that they do not qualify for an equity release mortgage.
Income and age are the main problem areas, although self-employed people can find it difficult too, as can those who have bought through an SCI (a French company for buying property), and the list doesn't stop there.
It pays off to think carefully about how to buy ....
Friday, 22 June 2007
Please get our name right ....
We are mortgagefrance.com
My first gripe ......
Since we first launched our website in 2002, there have been many others who have tried to copy us - not just other mortgage advisers, but some of the French banks as well.
You could say that imitation is a form of flattery - thank you.
But when it comes to copying our scripts, or changing them slightly - well .....
That Really Takes The Biscuit.
Thursday, 21 June 2007
Step by Step Guide to buying a property in France
Let's make that dream come true ....
Buying property in France is quite different to buying in the UK or other countries and is regulated at each step of the transaction. We'll explain what happens and when .....
Your very first step should be to find out the amount you can borrow - it's a waste of time looking at property that is out of your price range and it will save you from disappointment as well.
We've made this easy for you. On our website http://www.mortgagefrance.com/ you will find the 'Initial Enquiry' form. From just a few questions we will be able to calculate the maximum mortgage you can afford, and we'll give you a guideline of the price range you should looking at.
A rule of thumb guide is to take a third of your monthly income. This amount should cover the monthly cost of your existing loans and financial commitments (if you are a tenant and paying rent, that is classed as a financial commitment).
The monthly cost of your French mortgage and the life assurance cover have also got to be included in the 33% of your monthly income.
* For French taxpayers, deduct your social charges from your monthly income.
* For other nationalities, you can use your gross monthly income (do not deduct tax)
Buying property in France is quite different to buying in the UK or other countries and is regulated at each step of the transaction. We'll explain what happens and when .....
Step by Step
Your very first step should be to find out the amount you can borrow - it's a waste of time looking at property that is out of your price range and it will save you from disappointment as well.
We've made this easy for you. On our website http://www.mortgagefrance.com/ you will find the 'Initial Enquiry' form. From just a few questions we will be able to calculate the maximum mortgage you can afford, and we'll give you a guideline of the price range you should looking at.
A rule of thumb guide is to take a third of your monthly income. This amount should cover the monthly cost of your existing loans and financial commitments (if you are a tenant and paying rent, that is classed as a financial commitment).
The monthly cost of your French mortgage and the life assurance cover have also got to be included in the 33% of your monthly income.
* For French taxpayers, deduct your social charges from your monthly income.
* For other nationalities, you can use your gross monthly income (do not deduct tax)
Step 2.
Start looking at properties. There are literally hundreds of immobilier websites and you'll get an idea of what your money will buy. Contact some estate agents or property finders to help you find your perfect property. View the property as many times as you can to assure yourself it is exactly what you want. Step 3. Now you'll need to be thinking about which bank to use for your mortgage, and we have another questionnaire for this very purpose - the 'Request Quotation' form. It asks the necessary questions about you and the property you want to buy, and we'll do exactly as the form implies - we'll request those quotations for you.
Step 4. You'll be asked to sign the Compromis de vente - that's the sales agreement. You'll also be expected to pay a reservation deposit to secure your purchase of the property. You'll need to appoint your notaire as well (he's the French legal chap). If you wish you can use the same notaire as the person selling the property to you.
Step 5. Contact us, at mortgagefrance.com and we'll send you the necessary application forms you will need. You will need to supply other documents to support your mortgage application, such as proof of identity, payslips, tax returns, bank statements - we'll send you the list as well.
Step 6. Complete the mortgage application forms, gather together all the supporting documents and send the whole package to mortgagefrance.com. We will check your file and submit it to the bank for underwriting.
Step 7. The bank will underwrite your file, then the property will be valued, and after your life assurance application has been accepted, your mortgage offer will be issued.
Step 8. When you receive your offer letter you must wait at least 10 days, but no more than 30 days before signing and dating it, accepting the mortgage offer and returning it to the bank. When you sign the offer, you are committed to the purchase, and the life assurance cover will commence from that date. The bank will send the details of your mortgage offer to your notaire who will then prepare a deed of sale for your signature.
Step 9. Arrange for buildings/property insurance to take effect from the day of completion.
Instruct the notaire to request the release of mortgage funds, and make an appointment for the completion date.
Step 10. Completion day at last. Sign the relevant documentation with your notaire and the vendors. You are now the proud owner of your French property.
Congratulations !!
Wednesday, 20 June 2007
The French Mortgage Maze
Honestly ..... I'm not joking - it's a maze - full of hidden traps and pitfalls.
Each bank has their own lending criteria and their own mortgage products.
Some require higher deposits than others.
Some limit the mortgage term to 15 years, whilst others will extend the mortgage term to 25 years.
All charge arrangement fees, but some have a ceiling limit on what they charge, and others have no ceiling limit at all.
That's just the start ......
Differences in interest rates will depend on the type of mortgage and the purpose of the mortgage.
A mortgage to purchase a property will have a lower interest rate than a re-finance or an equity release mortgage.
As I said - it's a maze.
Day by day, we will be building a comprehensive list of the reports, starting from the very basics, such as our 'Step by Step Guide to buying a property in France', showing you how the french banks calculate the maximum mortgage you can afford, the mortgages available, such as ...
Each bank has their own lending criteria and their own mortgage products.
Some require higher deposits than others.
Some limit the mortgage term to 15 years, whilst others will extend the mortgage term to 25 years.
All charge arrangement fees, but some have a ceiling limit on what they charge, and others have no ceiling limit at all.
That's just the start ......
Differences in interest rates will depend on the type of mortgage and the purpose of the mortgage.
A mortgage to purchase a property will have a lower interest rate than a re-finance or an equity release mortgage.
As I said - it's a maze.
Day by day, we will be building a comprehensive list of the reports, starting from the very basics, such as our 'Step by Step Guide to buying a property in France', showing you how the french banks calculate the maximum mortgage you can afford, the mortgages available, such as ...
- Capital and Interest (variable and fixed rate)
- Interest Only (In fine and pure interest only)
- EuroSwitch
- Post-financement
- Property improvements
- Re-finance and Equity Release
Plus .... we'll be explaining the whole mortgage procedure in detail.
But please ...... if you have any questions whatsoever, do ask them.
Or if you have any comments, let's hear them.
Meet Stan and Titchy
Meet Stan ..... Le Chien
We inherited Stan some 6 years ago.
For anyone who knows Antibes, he was affectionately known as 'Stan from the Gaff'
It's his birthday today - he's 13 - Happy Birthday Stan !
Stan is a star !
He's also a Jack Russell
And this is Titchy - we did think of calling her Hilda, but because she was so tiny, and still is - well ... the name Titchy has stuck.
When Titchy was a puppy 5 years ago, she was advertised for sale on Riviera Radio Community Chest programme.
She's a demon with that football !
She too is a Jack Russell.
It's a great shame they've not had any puppies.
Sunday, 17 June 2007
Who would believe it is summer ?
It is pouring down and has been all day. It has been the perfect day for setting up our Blog.
Who are we ?
Well ....... We are mortgagefrance.com
Your English speaking mortgage broker living in the Gers in Midi Pyrenees, in the south west of France. We arrange mortgages with French banks for English speaking people wherever they live in the world, who want to buy a property somewhere in France.
France is a lovely country to live in, but things do not work the same way here as they do in other countries - French banks being a prime example.
We'll be writing about the mortgage procedure and bringing you up to date information of what is new in the French mortgage market. There is also a storeroom in which you will find articles we have written for press and radio, and we hope you will visit the links to our favourite websites.
It's also gives us the chance for us to share a part of our life in the Gers with you - maybe telling you of some of the nice things that happen and the not so nice things.
More importantly ... we're here to answer any questions you may have.
We hope you enjoy your visit.
And the good news is - it has just stopped raining and at last it's brightening up .....
Who are we ?
Well ....... We are mortgagefrance.com
Your English speaking mortgage broker living in the Gers in Midi Pyrenees, in the south west of France. We arrange mortgages with French banks for English speaking people wherever they live in the world, who want to buy a property somewhere in France.
France is a lovely country to live in, but things do not work the same way here as they do in other countries - French banks being a prime example.
We'll be writing about the mortgage procedure and bringing you up to date information of what is new in the French mortgage market. There is also a storeroom in which you will find articles we have written for press and radio, and we hope you will visit the links to our favourite websites.
It's also gives us the chance for us to share a part of our life in the Gers with you - maybe telling you of some of the nice things that happen and the not so nice things.
More importantly ... we're here to answer any questions you may have.
We hope you enjoy your visit.
And the good news is - it has just stopped raining and at last it's brightening up .....
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