There is so much good news for investors looking to buy property in the French Alps right now, that it’s hard to know where to start.Sterling is continuing to flex its muscles against the Euro, with an exchange rate of over 1.40 being seen this week, much higher than the €1.10 achieved in April 2011.
Indeed since the start of this year alone, the euro has weakened by around 8% against sterling, but looking back over the last 12 months, this figure has risen to 14%. For British buyers, looking for a second home in the French Alps, will get much more for their money. For example a property that cost’s €200,000, would cost a British buyer £149,000 now, compared to £164,000 a year ago. A saving of £15,000.
This coupled with the fact that French Mortgages are now at an all-time low – a 20 year fixed rate mortgage can now be secured at a rate of 2.65% for a standard client, means there has never been a better time to invest in the French Alps.
Here are the Top 5 tips to consider when looking to take out a French mortgage.
Plan for the future
Just as in the UK, there will be purchase costs to cover, on top of the deposit and capital you are putting into the property. French banks will want you to be able to demonstrate that you have a buffer, so that should anything unexpected happen, the bank will have the confidence that you have the financial ability to manage it.
Understand French Banks eligibility criteria
French banks are certainly keen to lend to overseas investors, provided they meet the lending criteria. However French Finance nstitutions do not have access to credit scoring data, which means all applications are based on proof of income. Three years tax returns and three months payment slips are required if employed, with three years accounts required for those that are self-employed.
Seek professional advice
One of the main reasons why French mortgage rates are at an all-time low is because the banks are competing for clients. As a result, it is likely that an international broker that specialises in French mortgages for non-residents will be able to access a very wide range of products from a number of French Financial Institutes. Allowing you to access which one is of the best value for you, rather than you simply approaching a more limited number of institutions directly.
Knowledge is key – rental returns
For both leaseback properties and buy to let properties, you must make sure you are confident of the returns that will be achieved, if you are factoring them into your mortgage repayments.
Do your homework
The French mortgage system is more regulated that in the UK, but this does lend itself for making it so secure and in part one of the reasons why it can offer such low rates, over the life of the mortgage. This does mean that application process can sometimes take longer than in the UK, however the positives do make it worthwhile.
If you are looking to discuss options for a French Mortgage or receive a quote for the exchange of sterling to Euros’, please do contact us, as we have long established relationships, with key providers, who can assist you.
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