Many people who have visited France have become enchanted with the French way of life and have contemplated moving to France or buying a second property here.

Q: What makes properties in France so attractive to UK buyers?
A: Quite simply, the prices.

Property prices in France are significantly lower for similar sized properties in the UK, and in many regions the value for money is considerable. It's exciting to think that what are merely dreams at the moment could very easily become a reality.

The whole process of buying any type of property or land in France is strictly regulated and the house buying procedure is somewhat different to that in the UK. To get a better understanding of the contractual procedures read our Step By Step Guide. If you're confused about any of the words, click on the Jargon Buster.

How Will You Buy?

Firstly, you should decide how you will buy your property - You have three options:

Buy for cash - a simple and straightforward option, but once capital has been invested in a French property it can be difficult to release equity although not impossible in some circumstances.

Re-mortgage your main home to raise the cash - again, a straight forward option and one that doesn't involve you having to deal with any French banks, but you will probably find that the interest rates charged by banks and building societies in other countries may be higher than interest rates in France. Bear in mind the mortgage warning 'Your home may be repossessed if you do not keep up repayments on your mortgage' You may be putting your main home at risk for the sake of your holiday home.

Finance your property with a mortgage from a French bank or mortgage provider. Of course you may encounter difficulties with the language if you go direct to lenders, but by using the services of mortgagefrance.com you'll have someone on your side - someone who understands your needs - someone who understands the French banks - someone the French banks understand - and together we can make a great team.

Prepare yourself for the initial costs

The costs of buying a property in France are high. Whether you are buying for cash or with a mortgage there are some costs you are going to have to fund yourself.

The Initial Deposit as your agreement to the purchase - On the day you sign the Compromis de vente you will be required to pay your deposit, usually 10% of the purchase price for older properties (less for new properties under construction or buildings under five years old). It is advisable to give your deposit cheque to the notaire or agent who is representing you. The deposit is held by the notaire/agent until completion.
- A word of warning: Do not give your deposit to the vendor. If the purchase goes wrong and does not complete, you may have difficulty getting back your deposit.
Notaire fees - For an existing property, be prepared for 8% of the purchase price as the cost for the legal fees. For a new build property, assume 4% of the purchase price. In addition to the notaire fees, there will be the land/property registration fee which varies from region to region. You can choose your own notaire, or use the same notaire as the vendor - whichever you choose, the cost will be the same, but you should consider whether you would prefer a notaire acting solely for you. Notaire fees can only be included in the mortgage for French tax payers. If you pay tax in another country, you will have to fund the notaire fees yourself.

Agents (Immobilier) fees - An amount between 5% and 10% can be charged and there is no hard and fast rule on whether it is the vendor or the buyer who pays the agents fees. If you are raising a mortgage you can include these fees in the mortgage if the agency fees are stated in the Compromis de vente (the sales agreement contract).

The Mortgage Costs

Mortgage deposit - The minimum amount you need to provide as your deposit for a mortgage depends on your nationality, the country you live in and where you pay income tax.
- For tax payers in France it is possible to arrange a 100% mortgage
- For UK and EU residents and tax payers the minimum amount of deposit is 15% of the purchase price.
- For residents and tax payers in non EU countries, the minimum amount of deposit is 20% of the purchase price.
Arrangement fee - All of the French banks and lenders charge arrangement fees. Most charge 1% of the amount of the mortgage, many with a ceiling limit of 1500 euros, although some do not have a ceiling limit at all, so you may end up paying 1% of the total mortgage. mortgagefrance.com will advise you of the arrangement fees and with one lender can offer a reduction of the ceiling limit.

The Three Essential Elements For Qualifying For A Mortgage

Sufficient income to service your mortgage. There is a very strict ruling about income and expenditure which is imposed by the Banque de France who regulate the banks - all the banks and mortgage providers adhere to this ruling without deviation.

Life assurance to cover the terms of your mortgage. Life assurance is mandatory to cover a mortgage. Most lenders, but not all, insist that their own in-house life assurance policies are used, and some will insist that cover for disability and/or incapacity to work is included in their policies.

Suitability of the property. Certain types of property are not acceptable for mortgage purposes - derelict barns, stone cabanons and wooden structures, will not be financed. Land can be financed, but only if the cost of a new build property is included and total renovation projects may cause problems.

Working out your price range

If you need a mortgage to buy your property, you should establish just what price range you should be looking at and whether you have enough cash funds for the deposit and legal fees and that your income is sufficient to afford the monthly cost of your French mortgage.

To find out what size of mortgage you can afford, please complete and submit the on-line mortgagefrance.com preliminary questionnaire, we will advise you about how much you can borrow and the monthly costs.

There are very strict rules which are imposed by the Banque de France on all the French banks and mortgage providers. These rules govern the amount a person can spend each month on a mortgage.

Only one third of your monthly income can be used to service a mortgage on your main home (or rent payments if you are a tenant), any other mortgages, any loans, credit card repayments, and if applicable maintenance payments. Of course the monthly cost of your proposed French mortgage plus the life assurance cover must be included as well.

For this calculation use your gross monthly income - do not deduct income tax. For people in the French tax system, deduct your social charges, but do not deduct tax.

Life Assurance

It is a requirement that all mortgages in France are covered by life assurance. Many of the French lenders insist that you use their policies and that it covers all the terms of your mortgage. Some lenders have different policies and insist that full disability cover is included as well as life cover.

Life assurance policies are medically underwritten and with a good medical record the premiums will be at standard rates. But, the cost of life assurance can be rated (increased) because of an existing medical condition. There could be a further problem, where in extreme circumstances, if the premium is increased to a such a high level, the cost of the mortgage and the life cover exceed the third of income rule.

In some circumstances because of medical history or an existing medical condition, disability cover may be declined.

There is, in most cases, a solution. mortgagefrance.com knows which lenders are most likely to accept policies from alternative life assurances companies and will advise you accordingly if you think there could be a problem.

The Property

The type of property and it's condition is an important consideration. There are certain types of properties that are not acceptable for mortgage finance - such as buildings constructed of wood, stone cabanons, derelict barns and properties with agricultural land. Some lenders will not accept properties that have been registered for commercial or business use such as gites and chambre d'hotes, shops with living accommodation or bars, restaurants and hotels etc.

The lenders have a responsibility to ensure that a property is habitable - having mains water, electricity and sewerage system which conforms to regulations. Apart from being structurally sound, there should be a kitchen with a sink, running water, drainage and electric sockets. A bathroom with sink, running water, drainage and plumbed in toilet. The lenders will advance mortgage finance for any of these works if necessary, but subject to you obtaining written estimates and using the services of tradesmen who are registered in the French system. However, if you are close to your income and budget level these extra costs may take your repayments over the third of income limit and your mortgage application will be declined.

Mortgage finance is possible for renovation projects or improvements works, but not for DIY projects. An architect or surveyor registered in France can submit their plans, oversee and sign off the works under their own guarantees and insurances. Builders and tradesmen who are registered in France have their own insurances for their work. Registered tradesmen have the correct insurances covering their work - it is the essential guarantee for the bank or lender. Written estimates must be provided with your mortgage application. A word of warning. If a property needs total renovation, the costs of the renovations may be too high in relation to the eventual value of the property and the lenders have the right to decline to lend you mortgage finance.

Buying to renovate or build a new property demands careful pre-planning. Certain French building regulations are very different from other countries and permission has to be granted from the local mairie. Detailed applications must be completed for the certificate d'urbanisme (and other documents) which state what developments are allowable on the property and its land.

Finding Your Perfect Property

With so much information readily available from magazines and internet websites advertising properties for sale in France, it is very easy to get an idea of what type of property is available and at what cost before you actually start your search.

There are many ways to search for properties: estate agents, property magazines and ''home hunters". In more popular or urban areas you will probably find estate agents who offer an English speaking service.

Take your time - think very carefully about the location and the type of property depending on whether you plan for it to be your main residence, second home, holiday home to be let out on occasion or a property to be let as an investment for the future.

Make a list of the important elements - the purchase price, the overall size and number of rooms, is a cave or garage essential, would you prefer a garden, terrace or balcony, etc - it will keep you and your estate agent or property finder on the right track to find your ideal property.

The Vendor and the Estate Agent

In France the process of buying a property is regulated at each step of the procedure, from the owner of the property placing it with an estate agent (immobilier) and setting the selling price.

At this moment a contract to sell (mandat de vente) is completed by the owner and the estate agent, clearly showing the owners price, the estate agents fees plus Vat (TVA) and the subsequent sale price of the property.

The scale of fees (barame des honorament) is strictly monitored and regulated and legally must be displayed at the agents premises.

You (the Purchaser) and the Notaire

When you decide to purchase the property you should decide whether you will use the same notaire as the vendor or whether to appoint one of your own choice to handle the conveyance (cession)

It's a legal requirement in France that all property contracts must be written in the French language and all money transactions should be in Euros. Any French property contracts that are written in English have no validity in France.

Making Your Offer And Signing the Sales Agreement. Once you have found your property, made your offer and had your offer accepted by the vendor, you will be required to sign a sales contract, the Compromis de vente (sometimes called the Promesse de vente).

The Compromis de vente

The Preliminary Sale contract (Compromis de Vente), is very important as all the legal aspects of the sales agreement are fixed at that time. The Compromis de Vente is binding for both the vendor and the purchaser (acheteur).

For the purchasing an existing property. The property agent can draft the Compromis de vente, but it advisable to use your notaire. His advice is essential regarding future obligations, as both parties involved rely on the clauses and conditions set out in the Compromis de vente. It will be written in French, but may have an English translation.

For the purchase of property to be built. The most common type of contract for the Sale of property for future completion (Vente en l'Etat Futur d'Achievement or "VEFA"). Both parties also sign a reservation contract (contrat de reservation), which outlines the price of the completed property, technical specifications and the dates and methods of payment. After paying a deposit of 5%, you will then need to sign a deed of sale, which contains the binding agreement of both parties on the various terms of the preliminary contract. It is at this stage that the vendor transfers ownership of the property to you, the purchaser.

Whoever is named as the purchaser(s) and if you are intending to use mortgage finance, the same name(s) must appear on your mortgage application. The Compromis is a legal contract, you should read it carefully and consult your notaire before signing it to check that all the details and conditions are correct, such as...

Details and identities of the vendor and yourself (the purchaser)
A full description of the property
The surface area of the property and land
The purchase price, the breakdown of fees and who will pay each fee
Details of the notaire and sales agent
Details of any fixtures and fittings included in the sale
Results of reports on asbestos, lead and termites
Details of your mortgage, the date of when you should have your mortgage offer and the date of completion
Any let out clauses (conditions / clause suspensives) and the penalties that will be incurred by you or the vendor if completion doesn't take place

The let out clauses

For you, the purchaser, the clause suspensives protect the deposit you gave to the notaire or agent as part of your agreement to purchase the property.

The most usual is a clause stating that your agreement to purchase is subject to you obtaining mortgage finance.

Other clauses can be inserted, such as the vendor having to carry out necessary repairs or subject to the dimensions of the property corresponding to what is detailed in the Compromis, and this is where expert legal advice is useful in the negotiation of these clauses.

Signing the Commpromis de vente

On the day of signing the Compromis de vente you will be required to pay your deposit (usually 10% of the purchase price) to the notaire or the agent.

Once you have signed the Compromis de vente, the clock starts ticking. You have got a set date by when you should complete on the purchase.

You are given a 7 day cooling off period (7 days in which to change your mind) this is the best time to instruct for a structural survey / inspection. If you do change your mind within these 7 days, you will get your deposit back.

A word of warning: Even though you may have a clause suspensive in the Compromis stating your agreement to buy is subject to mortgage finance, if you do not make reasonable efforts to obtain mortgage finance in time, then you could lose your deposit. You will probably be asked to produce a letter from the bank who declined the mortgage.

IMPORTANT: In all cases, if a mortgage is being sought the sales contract must contain a clause stating that mortgage finance is being sought (condition suspensive).

During the following weeks, the notaire will collect and verify all the documents such as property titles and mortgage documents. After which he will request the mortgage finance from the lender. When all that is completed you will be required to sign the final sales agreement (Acte de Vente).

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