France: Mortgage notes

Guidance notes for 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.

© Conti Financial Services Limited 2006

This article is reproduced with the kind permission of Conti Financial Services Limited.

For information and advice on overseas mortgages and residential finance in over 30 countries, contact Conti Financial Services Ltd on +44 (0) 1273 772 811 www.mortgagesoverseas.com