French Mortgages Xpress specialises in providing French Mortgages for off-plan purchases in France to non residents from the UK or further afield.

When you buy a property “off-plan” (VEFA – Vente en l’Etat Futur d’Achevement) the first thing you will do is sign a reservation contract (contrat de reservation) the buyer usually pays a deposit of up to 5% of the price.

You must ensure that there is a clause suspensive included in your contract making the purchase of your property dependent on your French Mortgage being approved.

The construction period:

Interest is paid on the amounts that have been drawn down from the French Mortgage according to the stage payment schedule. During the construction period, your monthly repayments will comprise of the following:

• Interest on the amounts drawn-down from the French Mortgage
• Mortgage protection insurance monthly premiums
• An engagement fee which the bank charges on the amount of the French Mortgage that has not yet been drawn-down (usually between 0.5 and 1.5 percent)

Your very first monthly payment will also include the banks arrangement fee (a fee that all French banks charge to arrange your French Mortgage). The amount varies from approximately €700 to €1200 depending on the bank and the French Mortgage loan amount.

When you have paid your personal down payment the developers will send you a document showing when each stage payment is due. These documents will most likely be in French. You must sign these documents and write the phrase “BON POUR PAIEMENT” after your signature. They will not specify in the letter that this is what you must do, so if you are unsure please contact us and we will be happy to advise.

The documents must then be faxed to the bank or us and the originals sent by post. This gives the bank your authorisation to release the next set of funds to the developer.

When the bank receives the signed documents they will issue a cheque for the required amount and send it directly to the developers.

Once the construction period is over and you have received the keys to your New French Property you will begin to pay interest plus capital monthly repayments on the whole of your French Mortgage .

PLEASE REMEMBER THAT THE BANK WILL NOT RELEASE FUNDS TO THE DEVELOPER WITHOUT THESE DOCUMENTS SIGNED AND PARAPHRASED “BON POUR PAIEMENT”.

Note: Remember, buying off-plan with a French Mortgage means that you are required to have your French Mortgage in place when you sign the ‘acte authentique’ which is usually at the stage of the construction of the foundations. So start your French Mortgage application plus, the life insurance application immediately after signing the compromis de vente!