French Purchase Process Using a Mortgage
Though some French mortgage applicants have previous experience of the French purchase process, a large number have not.
This page gives a brief summary of the steps involved if the French purchase process. Useful if the French purchase process is unknown territory or if you just need a short refresher.
Establish How Much You Can Borrow
If you need a French mortgage, it’s important to find out how much you can borrow before before starting on the French purchase process. This will save you potential disappointment and help convince the sellers and their agent that you are a serious buyer.
A Decision in Principle that will help you finalise your budget and provide detailed estimates for your personal contribution and fees. We provide this completely free and without any obligation – it’s part of our service. Just complete our online Quote Request form to get started.
We are always happy to provide confirmation that Olive Tree Mortgages have pre-qualified you for a French Mortgage.
Sign the Compromis de Vente
With your budget set, you’re ready to start searching for your dream French home. This is the point at which you commence the French purchase process in earnest.
You will need to find that property, have an offer accepted and sign a contract to purchase called a Compromis de Vente.
If you declare that you will need mortgage funds to complete the purchase the Compromis de Vente will, by law, contain a clause suspensive making the completion subject to mortgage approval . We will provide you and the agent and / or notary with the statutory information they require to insert the clause suspensive in the contract: Mortgage Amount, Term, Interest Rate.
When you sign the Compromis de Vente you will have to meet a fixed timetable:
- Retraction Date – the latest date at which you can unilaterally withdraw from the purchase contract.
- Mortgage Application Date – A fixed date by which you must have lodged your mortgage application.
- Mortgage Approval Date – The date by which you must show you have a firm mortgage offer or prove you cannot get the mortgage.
In France it typically takes between 4 to 8 weeks from lodging your mortgage application with a bank to receiving a firm mortgage offer so it is essential to start the mortgage application process as early as possible. It is quite possible to begin the process whilst you are finalising the price for the property.
Identify the Right Mortgage
We will work closely with you to identify the best mortgage options for your personal circumstances and project. Please note that French lenders are extremely prudent and the eligible options might seem surprisingly restricted.
Applying for a French Mortgage involves a lot of paperwork in support your application. We will make this process as simple and painless as possible and it will at least provide you with hands-on experience of dealing with the French administrative system.
Mortgage Application Preparation
A clear and transparent mortgage application is absolutely vital for success. We will check your mortgage application supporting documents and advise you of any bank questions we anticipate or additional items to ensure that the application is complete. With non-resident documentation we check that the paperwork is straightforward for the French lender to understood your application.
We will prepare the application for the lender in accordance with their usual requirements, along with our notes in support of your project. It’s then possible to submit a cogent and complete application to the bank.
Underwriter Review by the Lender
The lender will conduct their own valuation of the property, in most cases including a physical visit. We will tell you if this is required.
The lender’s mortgage analysts will review your mortgage application and advise if any further documents are required before submitting it to their underwriters for a decision. This process is usually completed within fourteen working days from receipt.
Once the application goes to underwriting for a decision we expect to hear back within a week. Certain cases (high sums, self-employed applicants) must also referred for Committee decision.
Normally at this stage the underwriters will give a final decision although sometimes they may ask for clarification on certain points or even some more documents. French banks do not rely on third-party credit checks: they prefer to build up their own profile of your global financial situation.
As you would expect a number of independent compliance checks are also carried out by the lenders.
What happens if the Mortgage is Declined
We will check that the application has been correctly analysed using all your documents and the correct currency. Occasionally a smaller amount or longer term may be sufficient for a revised decision. Sometimes lenders change their criteria. Even a previously accepted income scenario or country of origin may suddenly fall outside their lending criteria. We will obtain proof from the lender that the mortgage has been refused in case you wish to exit the purchase contract. We will explain the lender’s decision with you to identify possible alternatives.
What happens if the Mortgage is Approved
The bank will notify us that the mortgage has been agreed subject to any additional items such as updated documents, life insurance premium, financial guarantee (off-plan purchases), details of the Notaire and target completion date.
French bank account details are needed at this stage so the mortgage direct debit can be drawn up by the lender. We can assist you with opening a French bank account.
We will ensure these conditions are fulfilled as quickly as possible.
The Formal Mortgage Offer
The bank will issue you with a paper mortgage offer directly to your home address once the conditions are satisfied. At this point, not before, you have a mortgage offer.
French law requires that you must wait 10 clear days before accepting and returning the offer. The first clear day is the day after the package is signed for. Returning the offer too soon will void the acceptance and you will have to wait a fresh complete cooling off period.
The mortgage offer is valid for one month if your other commitments prevent you from posting the offer back immediately. The funds are available for four months after acceptance but this can be prolonged by negotiation.
Following Acceptance of the Offer
This is the final stage in the French purchase process. Once you return your mortgage acceptance, the lender will forward a copy to your Notaire along its legal pack. The Notaire draws up the mortgage deed. This deed will be signed at the same time as your property completion. At this point the Notaire can advise you the final sum due for the balance of the property price, the fees for the Acte and the fee for the mortgage deed. The Notaire will call for the bank funds directly from the lender in time of completion.
The mortgage repayment start date will be shown in your mortgage offer. The lender’s arrangement fee will be debited as advised, which is usually with the first part-month repayment. You need to ensure that your French bank account has sufficient funds to cover this.
French Purchase Process – That’s It
You should now be arranging things with your removal company!