Mortgage, first timers' question

Hello - we have just had a mrtgage offer from Credit Agricole.
The purchase price is 80000, but the offer stipulates 73000 lump, 7000 agency fee - in other words, we’re paying the agency’s ten percent. is this right ?

Also, is Life Assurance mandatory in French mortgage agreements, or can we make our own arrangements?

Any help gratefully received!
Tim & Dawn.

Maybe @berangere.chabenat can help with this?

Thanks James :slight_smile:

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In short; yes and yes.

Prices with agents are normally quoted FAI (frais d’agence inclus), ie that’s the price including their fees which are negotiated at the time the vendor signs the agent’s mandate, and the notaire would have given the breakdown of costs/fees etc. when signing the compromis de vente.

Yes you have to have insurance to cover the mortgage if something happens to you BUT things have now changed and you can now shop around for your own insurance although Pacifica (Crédit Agrisole’s insurance arm) are pretty good. I have both professional/business and personal insurance with them.

Hope that helps :wink:

Thanks Andrew - very useful. The quest goes on :slight_smile:

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Hello again everyone.
Can I just ask, is there any reason not to borrow the money here in Britain, to buy the property?
Or do notaires only accept French finance?
What’s to stop us borrowing 80000 here (UK) and paying by international money transfer?
Thanks very much for any guidance.

No reason I can think of, the notaire doesn’t really care where the money comes from, money laundering aside. If it’s a legitimate finance, then it has an audit trail so no problem.

If your income is in £sterling then it would obviously make a lot of sense to have your loan repayments in sterling too, so you’re not at the mercy of the exchange rate. Particularly in view of the likely fluctuations and uncertainties to come during the life of the loan. I know sme UK banks won’t lend on properties abroad but I’m sure there are plenty UK lenders who will.

Thanks to both - food for thought.
Much appreciated.

Hi Tim,
we mortgaged in the UK on UK property and sent the money to buy the house in France outright.

There were a few reasons for this;

  1. as Anna points out we have GBP income so a mortgage in the same currency avoids risk
  2. it was way less hassle to do 1)
  3. we split the ownership on the house in France with children (we also signed to have the wills and Inheritance Tax paid in the UK as that’s where the bulk of our assets are)

That sounds a bit confusing. Succession tax on a property in France is dealt with under French fiscal law and if under French succession law there is tax to be paid, it is payable in France. If under French law no tax is payable, then no tax is payable. Each country’s laws on inheritance tax are very black and white and specific, they don’t permit French real estate to lumped together with assets in the UK and all taxed together.

But your solution of mortgaging the UK property sounds the perfect solution, if that is an option for the OP.

Great detail, thank you both - we now have a mortgage in place with Credit Agricole and a payment account with FC Exchange, who explained very clearly how it all works. No fees, better rate, marvellous!
C.A. also have been brilliant.
merci a tous!

Hi Anna, well that’s what we thought but we were given the chance to sign as non-resident and confirm we were UK taxed (on death) Maybe we were asked to sign because we’re UK residents, tax-payers etc that we have a choice to be one or the other. I can imagine that we can’t be taxed on death in two places or we’d get two sets of thresh-hold allowance?

You should always ask the agency what their fee is before you even view the property. In these days of internet marketing there is absolutely no justification for an agent to charge more than 3% - 4% .

It’s also a good way of weeding out the inefficient agencies who just stick a 7% comm on everything and wait for the buyers to come in.

we scrapped our credit agricole mortgate and went with banque populaire but yes life insuance is mandatory and written into their mortgage.

im assuming your using the CA estate agents. I would get 2 or 3 quotes for mortgages and go with best deal.

Unlike here you can apply for many and it does not affect your rating.

agency fees vary though. when you say agent fees is that including the notaire fees calculated into the mortgage.

hahah just seen date lol your well past mortgage. hope its all going well.#