It is not as commonplace to refinance a mortgage in France as it is in the UK. It is generally expected that borrowers remain with the same mortgage for the duration of its term, and for this reason French property owners do not continually obsess over French mortgage rates like we do in the UK.
In addition, French mortgage lenders tend to be quite cautious about remortgaging properties. If you are interested in refinancing a French mortgage, you should contact Mortgage France right away in order to find out what your options are. When doing so, please be aware that you will need to provide the following information:
- Details on your existing French mortgage, including the lender, the outstanding balance and the rate that you are paying
- Details on your French property, including the original purchase price, the year purchased and its current value
- Your reasons for remortgaging
- Confirmation that you are not, and have not been, in arrears with your French mortgage repayments
The French refinancing options that may be available to you are always going to be more limited than those available when purchasing a French property. This is because of the cautious attitude of the banks, but also because of the amount of administrative work and costs involved in remortgaging. Some of these charges have to be covered by the borrower, including French land registry fees of around 1.5% to 2% of the loan amount. Factoring in a new lender’s arrangement fee and your commitment fee with Mortgage France, please be aware that the upfront charges for refinancing in France generally total around 5% of the loan amount.
In terms of making an application, borrowers can expect much the same process as for a French purchase mortgage. The requests for paperwork are just as comprehensive, and the underwriting criteria tend to be the same. In some cases French mortgage lenders impose even tighter criteria for remortgages, as they can be suspicious about why the borrower is resorting to this option. Those who have been in arrears with their French mortgage will not be able to remortgage.
The new French bank will carry out a valuation on the property before the mortgage can be finalised, at which point the borrower needs to provide an entirely up-to-date early redemption statement from the existing lender. After these final two hurdles have been overcome, the new arrangement will be formalised at the notary’s office. The latter requires the presence of the borrower, who can otherwise choose to prepare a power of attorney that needs to be certified by a notary in the UK and then apostilled by the Foreign Office.
All of this amounts to a somewhat onerous and costly process. The administrative efforts and fees involved only serve to underline the importance of getting the choice of your French mortgage right first time, when many more attractive options will be open to you. If, however, you feel that a French remortgage could be of benefit to you, then please don’t go it alone. Call Mortgage France today and let us talk you through your options right away.