True Safe Maximum Mortgage? Help!

astro_al

Hi - newbie here.

My situation is this: I moved to Paris about a year an a half ago for a job here - having just finished being a student for AGES. I am currently paying rent for a small apartment here and transferring about 1000 GBP to the UK to pay off my debts(!). While this sounds a lot, I must say I'm living quite comfortably here and not missing that money too much. In fact I just paid my taxes for the last year with no problems, so its woking fine.

My question is this: Next year I would like to buy an apartment in central Paris. Unfortunately the cost of something I would consider worth my while buying (ie not a shoebox) is probably more than a mortgage lender would be prepared to lend (ie more than 33% of my salary - a rule here I think). By the time I come to buy, I will have paid off my debts in the UK and I will have about 20k GBP which I intend to use to cover the massive fees they charge for buying a house here - leaving me with a 100% mortgage as my only option - despite having these savings.

I was considering either a guarantor mortgage or a joint mortgage with my father so that I could (hopefully) get a bigger mortgage than normal. Since I don't really miss this 1000 GBP going to the UK each month, I thought I could use some of that - when it becomes free - to pay for a bigger mortgage. So I need to know if this is:

a. possible
b. adviseable

Factors in my favour seem to be: I am fairly young and should be able to get a long mortgage, my father is willing to help, my wage should increase significantly and French companies operate compulsary profit-sharing schemes, so I am guaranteed at least a bit extra every year.

Is this safe? What am I missing? Any advice? How can I calculate a realistic safe maximum monthly payment - I KNOW I can cope with more than 33%, but there must be a reason they set it to this?!?

Thanks a lot - sorry for the long post! Al.

payless

Can't answer your question - as property is based in another country - with a different currency.

If I were to look at it reverse I would say, no probs with a French person working & buying in UK , but unlikely to get a lender to accept a guarantor who is based in France ( some rate exceptions)

Really need to speak with some lenders / brokers over there. OR see whether a UK bank would lend ( again if you are not UK tax and get paid in Euro- likely best they would consider is a low loan to value mortgage in (joint?) father's name.

Robert_Sterling_3

In this country at least your father would have to pay Capital Gains Tax on his share of the property. It might be better if he gave, or lent, you some money to help you buy the flat.

payless

perhaps even borrowing agisnt his UK property to fund it.

astro_al

Thanks for the input so far.

Just to clarify - I am paid in euros and pay french tax - I'm a completely french employee for an indefinite period.

I don't want this to COST my father anything - even if its a joint mortgage, I would pay all the mortgage myself, I'm just looking for ways to increase the mortgage value I can obtain as I feel I can safely pay more than the 33% maximum they set.

I'd prefer a euro mortgage, but would any UK lenders be prepared to give me a mortgage for a French property on this basis?

Does anyone have any ideas about how to figure how much of your pay it is wise to put into your mortgage - ie if I ignore their 33% figure, how do I come up with my own safe limit?

Thanks again, Al.

payless

I'd prefer a euro mortgage, but would any UK lenders be prepared to give me a mortgage for a French property on this basis?

Depends if your family have a good relationship with a major bank- (Barclays & Abbey overseas operations) have otherwise you might be better dealing thro' a specialist oversea broker ( conti comes to mind- but they charge fees)

In any case would be surprised if loan is against French property if you get away with less than 25% deposit requirement

33% of salary is an old generall rule of thumb - but best way is to see what you earn, and whether you can afford it will all the other expenses you have/ will have.