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Financing your french property -> Financing

financing
Mortgage
documents respond mortgage offer
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CA Sud Méditerranée offers you several types of loan in order to fund the purchase of :
  • main residence holiday home buy to let home improvements, renovation or construction
  • a plot of land
Fixed Rate vs Variable Rate :

Fixed Rate
. This is the option the most secure, as your interest rate and monthly payments are known in advance. C/A KeyFinance can offer you a fix rate that is flexible, which allows you to reduce your monthly payments between 10 to 20% each year. You can equally decrease the monthly payments, although this reduction must not lengthen the life of the mortgage by more than two years. In the case of early repayment you will be liable to redemption charges of 3% of the outstanding balance of the loan, or 6 months interest. This is what we call « l’IRA »(indeminités de remboursement anticipé).
Variable Rate
. The rate is fixed for the first year. The variable rate for the following years is based on the EURIBOR. The rate is reviewed at each anniversary. To secure your loan with C/A KeyFinance, we propose Variable Capped rates of 1%, 2% and 3%. If you opt for the capped rates of 1% or 2% , then with early repayment of the mortgage, you will have to pay redemption charges of 3% of the outstanding balance of the loan, or 6 months interest. The Capped rate of 3% has no early redemption charges if you wish to repay the mortgage early.
!! The variable capped 3% rate mortgage is flexible. In both cases, partial and full repayments can be made during the life of the loan. You can increase the monthly repayments by 30% each year. You can equally decrease the monthly payments, on condition that the reduction does not lengthen the life of the mortgage by more than two years.
You have the option of converting to a fixed rate mortgage at each anniversary.


Charges for mortgage security (Frais de garantie) :
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All CA Sud Méditerranée mortgages, are secured with a charge on the property.

Two types :
First charge on property "PPD – Privilège de Prêteur de Deniers" :

If you buy an old or a new existing property involving the transfer of ownership, the security associated with this loan is called a first charge on the property.
Contractual mortgage "HYPOTHEQUE":
However, if there is no transfer of ownership - as in the case of refinancing an existing loan or requesting an equity release - or you are purchasing a property under construction, the security is a contractual mortgage ("Hypothèque Conventionnelle").
The registration of the mortgage and the PPD is paid to the notary.
These charges for securing mortgages are based on the amount borrowed.
Notary fees are legally established by the Chamber of Notaries and are usually non-negotiable. Please contact your notary for additional information and the costs of securing mortgages.

Insurance obligations
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Two types of insurance are required when you purchase a home in France. One is building and contents insurance that covers the property itself and the other is life assurance (including total and irreversible loss of independence) covering the borrowers for the total amount of the loan.

Building and Contents Insurance
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Building, property and contents insurance is obligatory and the policy must be put in place before you sign the deed of purchase. Your notary will ask for a copy of the policy at the moment of signing the deed.

Life insurance / Mortgage Protection
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Taking out a life assurance policy to cover the amount of a property loan is not a legal obligation in France. However, potential buyers should be aware that French banks do not offer loans without it. In most cases, the mortgage protection and loan application are treated simultaneously.
The mortgage protection is :  
      - cover of the remaining capital due in case of death for non-residents.
      - cover of the remaining capital due in case of death or disability for resident.

Conditions for French mortgage with the CA Sud Mediterranée :
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Purpose and amount of the loan  Purchase, renovation, construction, leasebacks.
Contribution required as down payment : 20% of the purchase price
 
Borrowers are required to take out - Mortgage protection with CA Sud Méditerranée
- Building insurance with CREDIT AGRICOLE
 
Term  up to 30 years
 
Income criteria  Your total monthly mortgage and credit commitments (including the new mortgage) should not exceed 1/3rd of your net monthly income.
 
Type of mortgage (guarantee)  A capital and interest straight repayment mortgage secured on a French property requires “frais d’hypothèque” (a mortgage registration fee) which is payable to the “Notaire” (Notary).
(estimated as part of the offer of mortgage)
 
Repayments  Monthly repayments are debited automatically from your bank account.
There is no penalty for the early repayment of variable rate capped rate 3%
There is a penalty of 3% on the remaining capital, for early repayments of fixed rate mortgages and variable rate capped rate 1 and 2%