French leaseback mortgages - 100% ?

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Slim

Guest
Peggybetty

When I looked at the link, I see they only do 100% of the net price, as you have to pay back the VAT refund to them.

Slim 8)
 
B

Biggles

Guest
Main risk is that you could be left with a pig in a poke by the time the lease expires.

The trick is to choose one that will appreciate strongly so that by the time the mortgage is paid, you actually have something valuable at the end that's generating a decent income. So the one to pick may not necessarily be the one that's cheapest or offers the highest rate of return. remember 4% of €300K is worth more than 5.5% of 150K so while something might appear particularly attractive at the outset, you need to consider the future. Like everywhere, location is the key.
 
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carriglee

Guest
Hi Peggybetty

It is possible to get mortgages of up to 80% of the gross price of leaseback properties. Some lenders will allow you keep the tax rebate and hence you end up with a loan of about 96% of the price paid. If you want to know more drop me an email and I will dig out some additional info for you.

Regards,
Paidi
 
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peggybetty

Guest
Couple of things I found out recently

These might be of help to other people interested in leaseback. This is all my own understanding of the issues so I do stand to be corrected for any inaccurices.

Some 100% mortgages are not a true 100% mortgage - it excludes furniture.

Price (incl VAT) 119600
Price (excl VAT) 100000
Furniture 5000

100% mortgage is on 95000.

If you go through a broker - there are broker fees - about 1% of the mortgage
Then there are mortgage arrangement fees relating to the french bank - of 0.75% - 1% of the mortgage
Then there is mortgage registration fee, payable to the notary - I got varying amounts for this from 2% or 3% to around a 1K, again worked out on the mortgage.

Getting the full picture on the mortgage costs is not easy so if anyone else has better info please post.
 
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carriglee

Guest
RE: Couple of things I found out recently

Hi Peggybetty

Some French lenders will allow you to borrow up to 80% of the gross price (i.e. inclusive of furniture and vat) of the leaseback unit. Of these most will look to retain the VAT once you get your rebate. Some others may not do so, thus providing a loan of up to 96%. The level of funding that the lenders will provide depends on the ability of the borrow to 'afford' the loan and also on the lender's opinion of the development.

Check the broker's fees and independence before you use their services. If you're looking for independent advice then perhaps you're happy to pay 2% for the service. However, there are plenty of brokers that charge no fee.

French mortgage lenders' generally charge an arrangement fee. It should be no more than 1% and can be as low as 300 euro and is only applied on acceptance of the loan.

French mortgages do incur a notary registration fee of up to 2%.

Also remember that life insurance is mandatory for borrowers.

Regards,
Paidi
 
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