Getting A Mortgage in France

Posted by DRang3d

April 14, 2008

One of the founding members of the European Union, France is organized as a Unitary Semi-Presidential Republic. In 2002, France was the second largest recipient of direct foreign aide just behind Luxemburg (Luxemburg is the leading direct investment recipient do to its investment banking money transfers.) With a large corporate base France has a wide variety of private corporations operating within its boarders. These companies, however, operate with quite a bit of government intervention owing to the somewhat economically dubious (interfering) tendencies found through the country.

Government Policy
In a certain way, these governmental interactions in the corporate world have led to certain challenges that have slowed the potential of the economy. Currently, the leading issue facing the French economy is the low level of employed workers during their primary working age period. In France only 68.8 percent of the working aged population aged 15-64 years was working when compared to 80 percent of the Japanese.

Generally, this issue is attributed to decades of very high unemployment and policies by the government that let the younger population put off working for as long as possible while taking an early retirement in their early 50s. Overall, this does not leave much disposable income for mortgages and other personal wealth building opportunities. The government has recently been working to limit policies geared toward the current reality but only with limited success. Policies to extend the weekly hours worked in France were met with riots and a status quo situation. Currently, it is only imaginable of where the French economy could go if policies were to be enacted to stem these practices as the French have the leading per/capita productivity level in the world just ahead of the United States.

With fewer people working one would think that there would be less opportunity for mortgage loan qualification. This is not the case as loan products are advantageous to the borrower. Loans available currently include:

For purchase

Re-mortgage

Self build

Renovation

Equity release

Variable

Fixed

Interest only

Non-status loans are not available

The loan to value rate is also very sympathetic with a rate of 85% and can include fees. For an interest only loan, a loan to value rate of 80 percent can be had. Euro and Sterling currencies are available with a maximum term of 25 years and a maximum age at completion of 75. Interest rates are also remarkable and start at 3.65 percent.

For an economy of Frances sophistication the minimum documentation is fairly straight forward and includes:

Last six months of bank statements

P60 or equivalent

Letter from accountant indicating tax paid if self employed

Three years of audited accounts if self employed

Certified true copies of passports

Two forms of address identification

Completed application form

French bank account details

Property documentation

Less Than Efficient But It Works
The governments heavy hand in the economy of France has had its positives and negatives, depending upon the point of view you would like to take. From an employees stand point you are working less and enjoying life more, unless you really enjoy your work or work for a multi-national company. From the economists point of view the heavy hand of government and its economic leanings make the economy less than efficient and skewing overall results that affect others in a global marketplace.

Leo Fogarty is Marketing Director of the mortgage specialists http://www.Euromortgage.ie .He is also a regular author for financial magazines, most notably Property Gallery Magazine in Ireland and is an expert on mortgages, remortgages, equity releases and overseas mortgages.

Mortgage