Applying for a French mortgage: Step by Step Guide

Applying for a French mortgage is a relatively straightforward process. However, French lenders are notoriously risk-averse and entry criteria for mortgages can be strict, especially for foreign buyers. Proof of a solid, stable, and sustainable financial situation is always top of the list, and it’s never too soon to start getting your finances in order.

The ideal candidate for a French mortgage has a net monthly income at least three times that of their financial liabilities, minimal debts, and a degree of liquidity. If this isn’t you, now’s the time to start making some changes.

Consolidate or pay off any small debts or non-essential monthly payments, stop using your overdraft, set up a monthly savings plan, or consider cashing in smaller assets. If you can demonstrate financial stability and frugality, an ability to save, and a financial safety net, all these things will stand you in good stead.

Finally, get yourself in pole position by preparing your paperwork including bank, pensions and investment statements (see step five for a more comprehensive list).

There are two options when applying for a French mortgage. You can approach the French banks directly or you can use the services of an independent French mortgage broker. Using a mortgage broker can be beneficial, especially if your situation differs from what French banks consider the ‘norm’ (a non-EU resident or self-employed, for example). An independent mortgage broker will be able to save you a lot of time researching the market and finding the best deal for you. Crucially, they can also advise you on the application itself, ensuring the best chance of being approved.

Start by deciding on the kind of mortgage that you are looking for—our guides to French Mortgage Types and French Mortgage Rates are a good place to start—then make a list of potential mortgage lenders in France. It’s always worth consulting several mortgage lenders to see which will offer you the best rates.

You can only apply for a French mortgage once you have signed the Compromis de Vente and your property purchase is underway. However, you can obtain an agreement in principle (AIP) from mortgage lenders in advance. The benefits of this are twofold. You will have an idea of how much you will be able to borrow and peace of mind that you have the funds in place to complete the purchase. It will also show property vendors that you are serious in your search and may increase the chance of having an offer accepted once you find the one.

Once you’ve had your offer accepted on your French property and signed the Compromis de Vente, you can lodge your mortgage application. The Compromis de Vente is a legally binding document, so it’s a good idea to have the notaire add a ‘clause suspensive’ (a conditional clause) to the contract. This means that if your mortgage application is unsuccessful, you will be able to end the purchase without losing your deposit.

Be aware that some sellers may be more cautious of signing a Compromis de Vente with a clause suspensive, especially if there is competition from another buyer who is happy to commit without this requirement. If you followed our advice and obtained an AIP, this is often enough to put their minds at ease.

You’ve probably heard the rumours about the French love of paperwork and this is certainly the case when it comes to mortgage applications! Expect to have to present at least the following:

• Your passport(s), marriage certificate (if applicable), and proof of residence.
• Proof of income (for self-employed borrowers or business owners, this includes audited finances from the last three years) and proof of any additional income from pensions, dividends, rental income, etc.
• Bank statements from the previous three months for all accounts that you hold including business, personal, and savings accounts.
• Tax returns for the last three years.
• Employment contract or accountant’s statement (self-employed or business owners).
• Copies of current mortgage or rental agreements.
• A state of assets form.
• The Compromis de Vente.
• Life Insurance certificate or application.

Depending on your individual situation, you may be asked to provide additional documents. French banks are forensic in their analysis, so don’t expect to be able to hide anything or ‘get away’ with a verbal explanation. If there are unaccounted payments or outgoings in your accounts, expect to be asked for proof!

French mortgages can take as long as 12-14 weeks from initial enquiry to the release of funds. Once your mortgage offer has been issued, you can confirm the exact rates and terms of the offer and you will have an 11-day cooling-off period. This is mandatory, so even if you are ready to sign, you’ll have to wait 11 days (if you try to return the offer too early, it will need to be reissued, so be patient!).

After the 11 days, you can return your completed and signed offer.

Once the mortgage process has been completed, your notaire will be able to request the funds from your lender, after which the property purchase can be completed. You’ll be invited to sign the Acte de Vente, the final sales agreement with your notaire, after which you will officially be a French homeowner.

Congratulations!