Notaire & Fees:
The notaire is the lawyer who usually works on behalf of both parties of the sale in order to draw up appropriate deeds and to collect any taxes realized on the deal. The notaire should organize the suitable searches and checks on the property and often draw up the first contract which is signed by both parties at the same time (the “compromis de vente”). There could be only one notaire involved, representing either parties, or one notaire for each party.
The total cost will be the same for you whether there is 1 or 2 notaires involved.
The notaire fees are around 7.5%- 8% of the purchase price. They are made for the major fee to assign the bank’s warranty on the property.
Compromis de Vente:
This is the preliminary contract stating your firm and definitive intention of buying/selling a property at an agreed price, under certain conditions (mostly under the condition you will obtain a mortgage – this is the clause suspensive à l’obtention d’un prêt). The transfer of the property will happen once the final deed of sale is signed, roughly 3 months after the compromis is signed.
The compromis can be prepared by either the notaire or the estate agent and needs to include all the details of the property.
A deposit of 5 to 10% of the purchase price will be held on the notary’s account until the completion of the purchase.
Note that once you have signed the compromis, a 7 days cooling off period will start (from the day you receive a certified letter by post notifying you of the sale). During this time, you can withdraw from the sale without penalty.
The duration of the compromis can be extended, upon the approval of both parties.
Clause Suspensive – Mortgage Clause:
Once you have signed the compromis de vente and sent your 5-10% deposit, the mortgage suspensive clause will start. The minimum legal duration of this clause is 30 days (although we advise you extend it to 45 days if possible) during which you will need to obtain a loan offer from the bank. Once this delay has expired, you will be at risk of losing your deposit and the property.
It is therefore vital to get as much of the paperwork ready as possible and have it sent to the bank as quickly as possible after your offer is accepted.
If there are 2 applicants, the minimum coverage between the 2 will be 100% of the mortgage amount. The split between applicant 1 and 2 will be decided according to each applicant’s respective revenues.
Ex: Providing Mr and Mrs earn the same revenues, the bank will request a minimum cover of 50% for each applicant. However, you could very well request that both Mr and Mrs are covered for each 100% of the mortgage amount. This will of course bring additional costs.
On average a death only cover costs about 0.30% of the mortgage amount (for example: 300,000€ borrowed x 0.30% = 900€/year, thus 75€/month). However, this could be cheaper depending on your age and the provider we choose. We will compare these costs together.
For residents in France who are under the French social security system, banks might require some additional covers such as “ITT” (total temporary inability to work) and this would bring an additional cost.
The insurance premiums can be linear: As you get older the cost of covering you gets higher but the amount of mortgage outstanding decreases, the bank will thus calculate a linear monthly premium or can increase according to your age (this is often the case with interest only mortgages where the capital borrowed stays the same over the term of the loan). Again, we will help you make the right decisions!
If you currently have existing un-assigned life cover, we may be able to use this to cover your French mortgage. Please provide any details of existing policies if you think they may be usable.
Loi Scrivener 2 (Cooling off period after the receipt of the offer):
This French law imposes the mortgage offer to comply to certain conditions. It should include:
A clear repayment table specifying the amount of the capital borrowed and interests paid for each monthly payment up to the end of the term.
The amount of the application fees, as well as any associated fees.
The duration of the validity of the offer.
A delay of reflexion of 30 days with a minimum of 10 days starting from the day you receive the offer (it can thus be accepted at the earliest on the 11th day).
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Your French Mortgage in English!
Spectrum International Mortgages at The French Property Exhibition, Olympia London, 15th – 16th September 2018 Spectrum International Mortgages is pleased to be exhibiting at The French Property Exhibition on the 15th and 16th September. Established over 25 years ago,...read more