The mortgage process
All French banks need to carefully assess your affordability and typically allow up to a third of your monthly disposable income to be used to repay all of your loans, mortgages, credit cards etc. You will therefore need to provide evidence of your income, together with bank statements and details of all existing finance.
When assessing your overall financial position and ability to repay a new mortgage your existing assets and savings will also be taken into consideration.
The ‘loan to value’ ratio is another important calculation when assessing the affordability of your mortgage. You will need to prove that you can afford to pay the deposit and fees associated with the property purchase from existing savings.
When deciding on whether to take a fixed or variable rate mortgage and the duration of the loan, think about how your situation may change in the future. Do you need the flexibility to modify your monthly repayments or repay the mortgage early without additional fees?
When you find the right property and commit to buy, you should include in your sale/purchase agreement that you intend to finance your purchase with a mortgage. This clause allows you to withdraw from the purchase in the event that the mortgage is not granted.
The mortgage offer will include the amount borrowed, duration & type of mortgage, interest rate and type of guarantee. Obligatory life insurance associated with your mortgage must also be arranged.
You can sign the mortgage offer after a cooling off period of 11 days.
The bank will then be in a position to exchange documents with your notaire and send funds for the purchase to take place on your agreed date.