In spite of French banks having tightened their lending criteria, obtaining a French mortgage is still possible. Most importantly, you must present a coherent file and pay particular attention in the way your finances are organised. By doing so you will increase your chances of being successful in your French mortgage application
First of all, it is highly recommended to pay off all personal loans, car loans & credit cards balances when it is feasible. If you cannot repay in full, try to gather them. As a matter of fact, the banks will scrutinise your last 3 months bank statements looking for discrepancies. Therefore, make sure you present flawless bank accounts. A saving account and the capacity to save 300 Euros per month are compulsory if you want to stand a chance. Finally, regarding your employment status, stability is important, when employed you must be on a permanent contract. Hence, if you are still on trial period, wait the end of the period to apply for a mortgage.
Last but not least, all the monthly costs of your current financial commitments (current main residence mortgage, other mortgages, car loans, loans etc…) cannot exceed one third of your monthly income (salary, rental income, dividends, investments etc…). It is called the Debt Income Ratio. This tool is used to assess financial profiles, which enables us to conclude on the viability of a project. We usually send our clients a straight forward questionnaire that has to be completed with basic financial information and returned to us. We will use this information to compute your Debt Income Ratio. A minimum of 10% of the property purchase price will be required to at least cover the notary fees and the deposit. Currently the maximum loan to value is 85% as most banks have stopped providing 100% financing. If you do not meet all the criteria stated by the banks there is a possibility for you to overcompensate for a high level of debt if you can present substantial savings or liquid assets that would demonstrate solvency and your ability in managing your finances efficiently.
Despite banks sharing similar methods they tend to specialise in different project type or client profile. Therefore, if you mortgage application has been refused by a bank it is possible that another bank would accept financing your project.
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