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How to get ready to find your dream home in France... Step I: Finding Financing… Property Divisions of Adrian Leeds Group, LLC.

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Presentation on theme: "How to get ready to find your dream home in France... Step I: Finding Financing… Property Divisions of Adrian Leeds Group, LLC."— Presentation transcript:

1 How to get ready to find your dream home in France... Step I: Finding Financing… Property Divisions of Adrian Leeds Group, LLC

2 Who are the lenders? Many lending institutions in France now specialize in mortgages designed specifically for non-residents. Property Divisions of Adrian Leeds Group, LLC

3 Who are the lenders? French Property Insider Consultants can assist you free of charge with applications to any of these six lenders: BPI, UCB-IB, Crédit Foncier, GE Money Bank, Barclays Bank and HSBC Property Divisions of Adrian Leeds Group, LLC

4 What qualifies you for a loan? 1. Income. Loans are income based. You may borrow up to 1/3 of your disposable income. Rental revenue may be considered as income. Property Divisions of Adrian Leeds Group, LLC

5 What qualifies you for a loan? 1. Income. Consumer debt (credit card balances), taxes and insurance premiums ARE NOT deducted from disposable income. Car payments, other mortgages and other debts ARE deducted from disposable income. Property Divisions of Adrian Leeds Group, LLC

6 What qualifies you for a loan? 2. Age. The term of the mortgage may not exceed approximately 70 years of your age. This is directly tied to a mandatory life insurance policy which secures the loan. Property Divisions of Adrian Leeds Group, LLC

7 Why is life insurance required? It is national law that requires all property to be secured by a life insurance policy so in the event of the borrower’s death, the property is free and clear for inheritance purposes. Some lenders now offer loans with no secured life insurance policy, but loan to value may be as low as 60%. Property Divisions of Adrian Leeds Group, LLC

8 What if I already hold a life insurance policy? The policy must apply specifically to the mortgaged property. Normally, the policy is provided by the lender’s associated insurance company, however, the borrower may obtain insurance from an outside source. The borrower must complete a medical questionnaire and often undergo an exam to qualify for the insurance and therefore the loan. Property Divisions of Adrian Leeds Group, LLC

9 How much can I borrow? Traditionally up to 80% of the purchase price of the property, sometimes up to 90%. Property Divisions of Adrian Leeds Group, LLC

10 Will the mortgage cover Notaire fees? No. Property Divisions of Adrian Leeds Group, LLC

11 Will the mortgage cover agency fees? Yes, as long as the fees are included in the purchase price of the property. Property Divisions of Adrian Leeds Group, LLC

12 Will the mortgage cover renovation? Yes, under conditions: the lender will provide up to 80% (or in some cases 90%) of the appraised value of the property including the renovation costs. Property Divisions of Adrian Leeds Group, LLC

13 What types of loans are available? 1.Fixed rate 2.Variable 3.Interest Only 4.Combination Loans Property Divisions of Adrian Leeds Group, LLC

14 No, each lender offers a variety of different products. Do all lenders offer the same products? Property Divisions of Adrian Leeds Group, LLC

15 Euribor (the money market reference rates for the euro) plus margin: 3-month Euribor August 15, 2007: 4.525% 12-month Euribor August 15, 2007: 4.632% What are the current interest rates? Property Divisions of Adrian Leeds Group, LLC

16 Can I get pre-approved? Lenders will accept applications prior to purchase of a property, but will provide a “pre-approval in principle” only, estimating the applicant’s borrowing power. Property Divisions of Adrian Leeds Group, LLC

17 Can I get pre-approved? We highly recommend understanding your borrowing power BEFORE visiting properties which may not meet the lending capacity. Property Divisions of Adrian Leeds Group, LLC

18 Who is held responsible for repayment? Those on the title deed of the property are held responsible for repayment of the mortgage. Property Divisions of Adrian Leeds Group, LLC

19 How do I may repayments? Your payments will be automatically deducted from your French bank account. Property Divisions of Adrian Leeds Group, LLC

20 Can I deduct the interest portion of the loan on my U.S. tax return? Yes! We recommend you consult your accountant or tax attorney for advice. Property Divisions of Adrian Leeds Group, LLC

21 How do I get started? Contact the Adrian Leeds Group, LLC and French Property Loan: Adrian Leeds ®, Director: John Rule, Mortgage Manager: Property Divisions of Adrian Leeds Group, LLC


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