I recently assisted a client looking to re-mortgage and release equity against his property in France. The property in question was a beautiful rental property (a 100-year-old renovated barn) with a beautiful view of Mont Blanc, valued at just over €2.6million, with a current mortgage of €320,000 with a French retail bank. My client was reluctant to sell the property as he generated significant income from the property by renting it out on a seasonal basis. This rent allowed him to pay for the mortgage on the property and also take some profit on a regular basis.
Unfortunately, my client wanted to refinance the property from a capital repayment to an interest-only basis but was struggling with his current lender. He had recently divorced from his wife and was therefore looking to buy her out. He needed to remortgage his existing facility, raise an additional €700,000 to cover this cost. Frustratingly, his current lender felt this level of borrowing would be too much of a stress on his income, so they were unable to accommodate his request.
He was therefore interested in exploring alternative options, approaching Enness to take advantage of our extensive network of industry relations. I was confident I would be able to help, as my client was a UK resident and tax payer, so in this sense, he was likely to be considered a low-risk client by the banks.
We also provided him with a third-party tax consultation who suggested a way of significantly discounting the legal costs by reassigning (and not redrafting) the existing mortgage deed.
If possible, he also wanted to explore options which would cover the fees for property in France, which are quite extensive.
I, therefore, set to work approaching lenders I thought would be a good match for this case. I have a close working relationship with this lender, so they were able to offer my client a loan of just over €1million, with an additional €85,000 to cover supplementary costs. As an additional bonus, I was able to work with the tax consultant and the bank to get them to accept the old mortgage deed, which was quite a coup given the time and money this would save.
The final facility secured was a 13-year term at 1.55% + EURIBOR; these terms will enable my client to carry out his plans. If you have a property in France which you are looking to refinance, please get in touch for further consultation and I would be delighted to advise you further.
France is one of the most popular property markets for foreign nationals: we are all aware of the chic appeal of Paris, the enduring allure of the Riviera in the summer or the freshness of the mountains in winter.
Covering everything from search and negotiation to making an offer and the legal processes, the guide will help you fulfil your dream of property ownership in France.