We currently own our tiny home here that we bought for cash, €34,000, but since starting a family we’re looking for something much bigger - which we’d need a mortgage for.
We currently earn around €30,000/year so what sort of mortgage should we be looking at?
Given the work still required, I don’t think we’d be able to sell our current house quickly.
A friend told me that 100% mortgages are sometimes available in France. Is this true and if so, what sort of requirements are involved?
Just trying to figure out if 1) it’s actually possible for us to buy a larger house, and 2) how exactly we’d go about financing it.
I’ve never had a French mortgage Mike but I do know Notaire’s advice is free so it might be worth popping into the one you bought the house through. I see from this that 50 year mortgages are possible.
And there are lots of simulators inline to give you an idea of how much you could borrow and the cost of it. It is similar, although an additional insurance is obligatory.
If yiu think your current home will be hard to sell have you thought about just getting a bank loan and extending?
@JaneJones that’s a good idea, it would work out cheaper and Mike would definitely get exactly what he wants, provided planning permission is granted. Worth going and having a chat with the people in the mairie.
Hi all, thanks for the suggestions, it’s appreciated!
We can’t extend our current property. We’re sandwiched between an empty property and a boulangerie on the High Street of a popular village. Opposite the house is a very historic Abbey and Tower so we’re very limited in the village when it comes to making modifications to property.
I’ll definitely check out some simulators. Is there a maximum monthly mortgage payment that would be approved based on your monthly earnings?
Maybe I’m not explaining that very well. For example would they not approve a mortgage if the monthly payments exceeded let’s say 40% of your monthly salary?
I few years back I organised a mortgage for Mrs Wozza so she could buy half of our house. The general rule was not to exceed +/- than 30% of your income including debts i.e other credit owed, then x the number of years you need to pay back. Go & have a word with your bank, they’ll give you all the info. All banks are bound by the same regulations.
As Wozza said, the surendettement rules won’t allow your total loan repayments to exceed 30 per cent of income.
Why not apply to you bank for a loan ‘in principle’ before you start house hunting, so you know what properties are in your price bracket. They normally want shedloads of paperwork so if you get that done now and get a loan approved in principle it will save time when you’re ready to make an offer because you won’t have to start the process from scratch.
The general rule used to be : no more than 1/3 of your monthly income in mortgage repayments. Given current interest rates and how desperate banks are to lend money, that might have been relaxed somewhat.
Also useful, even if you don’t end up choosing their proposed financing solution, is to contact a local financial advisor company specialising in property acquisition. Sometimes, they can get you a better deal than just going through your bank, and it also helps to put pressure on your own bank to offer you a better deal with it rather than seeing you depart to a competitor. Generally, you will only pay a small commission if you choose to take up the financing solution that they propose. Although we used a local one when we were looking to finance the acquisition of our present house, in the end, our bank offered us a better rate (the advantage of competition).
Certainly as Alex says it’s possible to get a better rate by using a courtier or shopping around yourself. And despite all the consumer protection that’s in place in theory, there are courtiers who seem to be able to get people a loan that on paper they wouldn’t get, although this probably isn’t a great idea at present because if interest rates change they can only go up.
