As a foreign investor, you may be inclined to seek mortgage financing for your French real estate from your local, trusted bank. However, obtaining French financing may offer tax, equity, inheritance, currency exchange or other benefits that would make obtaining a French mortgage a good idea. When obtaining funds from a foreign country, you certainly do not want to be taken advantage of because of inexperience with foreign mortgage products or language barriers. The first step to protecting yourself and your assets is to read through some of our other articles about the French mortgage market and familiarize yourself what is available. The second step is making sure you have qualified, bi-lingual professionals looking out for your best interests. And the third step is to know about and understand the legislation that the French government has in place to protect consumers purchasing French real estate. The French legislation provides a variety of rules and restrictions with which the lenders must comply.
This legislation springs into action before you even contact a lender. Any loan advertisement must clearly identify the lender, loan characteristics including annual percentage rate, application procedure and delay periods. After you apply for the loan, any preliminary offer of financing must be in writing. The preliminary offer must give details of the loan including an amortization schedule showing principal and interest payments, insurance requirements, options to transfer the loan to a third person and any cancelation cost if the loan does go through. The consumer must have a minimum of thirty days in which to decide whether or not to accept the loan and its conditions. Once the loan is finalized the consumer has an additional eleven days to reconsider and even cancel the loan without penalty.
Consumer loan protections even continue after the mortgage has been finalized and the money lent. In the event of a legal dispute over the property acquisition, it is possible to have the mortgage payments suspended until resolution of the matter. Often, lenders will impose a prepayment penalty if a consumer wants to pay off their loan early, however, this penalty can not be applied if the prepayment is the result of a retirement, death, or job change.
French consumer loan legislation protects all real estate purchase transactions with the exception of purchases by professional property dealers or at auctions. Overall, French law provides a safe lending environment for informed borrowers, regardless of nationality.
by Cheryl Hartzman, AboutFrenchProperty.com - Copyright © About French Property
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