13 May 2020 - French Mortgage News | International Mortgage News | Partners News |
IPF French Mortgage update May 2020
Here is the latest French Mortgage update from International Private Finance.
Prospective British and International French property buyers continue to contact us to understand what their options are when they feel the time is right to move forward with their French property purchase.
Moves by the UK government to open up their own property market and indications from the UK and French governments that their citizens may be excluded from any travel quarantine are encouraging signs for International buyers of French property during this coronavirus pandemic. Some of our estate agent partners over in France have started to do actual viewings, and many more are offering virtual tours.
As of Monday 11th May, the official start of the deconfinement, French businesses and schools have started to re-open. Whilst the French banks have never been closed, in reality – due to both staff shortages and the need to minimise those working in the offices – they had certainly stopped offering certain services whilst others were subject to long delays.
The good news is that many French mortgage lenders are starting to open up more services as well as become more productive with the backlog of cases. Over the past week, in our conversations with the non-resident lending departments, it is obvious that the intention is to return to business-as-usual as soon as possible; starting this week with many of them accepting new French mortgage applications. However, the ability of certain banks and even branches within the same banking group to handle new and existing mortgage applications varies greatly. Using a French mortgage broker, therefore greatly increases your chance of getting your application in front of the most suitable bank – both in terms of the product and rate but also based on their ability to prioritise your file above others.
French mortgage lenders are accepting new applications with some criteria changes
There have been some changes to the eligibility and affordability criteria but we are fully up to speed with those and will continue to monitor the situation. Changes in criteria is happening quickly at the moment and are usually implemented with immediate effect so it is important to have a direct line to the underwriters, as the best French mortgage brokers do. This will ensure that anything that could affect the success of any application can be examined prior to a submission. Without this, any direct application risks getting rejected, usually without any reason being given, and given the current backlog at many banks, you may not even find out about the rejection until a couple of months after your submission date.
However, the fact that many of the French banks are accepting new mortgage applications is a hugely positive sign that lenders are going to continue to lend to non-residents in the future and that we won’t see a contraction of the market as we did after the financial crash of 2008.
Get your house in order before applying for a French mortgage
They will, at least in the short-medium term, undoubtedly be more cautious which is why getting your finances in the best shape is probably the most important thing (after contacting us obviously!) you can do to ensure your application will be successful. Even if you are not planning on purchasing this year, you would be wise to do some financial housekeeping now, to ensure that your paperwork is all in order.
- Can you show a ‘capacity’ to save? French banks want to ensure you are not spending every penny on your French home and leaving you without a safety net. Showing them, via a monthly standing order to a savings account for example, that you can save for a rainy day.
- In the same vein, regularly dipping into your overdraft (whether it’s an authorised facility or not) is rarely looked on favourably – even if it is only for a couple of days a month. Many UK bank accounts now offer text alerts when you are nearing your limit so if you know that you do occasionally go overdrawn, perhaps try using one of these.
- The French love of bureaucracy is not an urban myth – the banks are forensic in their analysis of your personal and financial affairs and will require far more evidence of your situation than you will be used to – 3 months of payslips is just the tip of the iceberg! Check out our video that details the type of paperwork you will need to be able to produce and check that all your online bank, investment, pension and mortgage accounts will let you download official monthly and annual statements. Some paperless accounts can take a few weeks to process any request for a paper statement – which will add unnecessary delay to any French mortgage application.
For more information on how to ensure your French mortgage application will be successful – check out our ‘Top Tips’ video. Or get in touch with us via our online form, or on 020 7484 4600 so we can provide you with a personalised French mortgage quote, and ensure your application is at the top of the pile.
Found a property? Request a quote now or call +44 (0)207 484 4600