French mortgage for property developer

Arnaudin

I'm a property developer here in the UK. I want to buy a property in France as an investment for my future (I want to spend some time there/let it out some of the time to help with the mortgage).

I'm finding it hard to get a French mortgage, as the French lenders I've come into contact with won't lend to property developers. Most of my income is from flipping properties (buy, renovate, sell), but have been told that only my buy-to-let income will get taken into consideration (this constitutes a small amount of my income). With all of my income taken into account, I should be eligible to fit the criteria of what I want to borrow, but with just the rental income taken into account I wouldn't be eligible.

Anyone have any experience of this/any contacts?


Thanks!

eeyoreworld

We bought a property in France 7 years ago, I was an IFA at the time specialising in difficult to place mortgages, my partner also working. We had no problem with affordability and were putting 40% down so 60% LTV.

I did our mortgage and we had to JUMP THROUGH HOOPS to get the mortgage accepted. They wanted to see every bit of paperwork relating to our financial circumstances you could imagine and they spent over 2 weeks phoning and emailing a barrage of questions.

Paperwork they requested went back years and they also wanted to see old bank statements from a joint account I held with my ex husband 5 years prior to the application! Even though the bank had a UK arm, they didn't at the time (may have changed now) use credit reference agencies based in the UK so we had to provide everything.

Bearing in mind when an offer is accepted in France you are legally bound to buy and have to set the date for 'exchanging' there and then, this was the most stressful time ever. I flatly refused to offer financial advice to clients buying abroad after doing this as, it was so time consuming and a pressure cooker. I would never go through it again! Not to mention, the 13k Euros of legal/notaries fees which prices are set by the government where they charged me for things to do with mortgage I had actually done myself!

My advice? Buy a holiday home here, rent a gite when you spend time in France and perhaps look to a non mortgaged purchase further down the road!

Arnaudin

Thanks for your reply. I am really getting a grip of how complicated it is, but refuse to give up - this has been my dream for some time now.

eeyoreworld

Try the UK banks with French branches, Barclays is one that offered services in both countries for starters. A 'MIP' isn't a guarantee as I am sure you are aware and it doesn't seem right what your broker is saying, it hardly sounds transparent and above board so I think you were right to be wary.

As a broker in a previous life, tbh, I would want a large fee for a French mortgage as I knew the time it chewed away but as a client, I would be trying to negotiate a fee based on a completed mortgage and if this is around the 2k mark to offer to pay this if the mortgage goes ahead but if it doesn't to be paying a typical UK fee so its a win win for a broker.

Remember it is unlikely that a foreign bank will play a proc fee to va broker so it would be up to you to plug this gap, it is a lot of work for someone to undertake and a decent broker or IFA will earn there money and some with this type of mortgage. If you are set on this, approach some other brokers and try and negotiate fees unless you decide to go it alone where I would say you will need the force with you!

If you have audited accounts demonstrating your income it should be doable however be prepared for a lengthy process so don't go signing a compromis just yet and expect to have to pay for accounts etc to be translated by a professional company.

Remember also if you do go for it you can have written into the compromis that you don't have to go ahead if you can't get a mortgage, ensure you have this clause!

Good luck, it was our dream too and I am glad we did go ahead.