Mortgages French Catalogne

Buying a property in Catalonia with mortgage funding.

There are many financial options available for those people who wish to purchase a property in Catalonia with mortgage funding:

Products include:

    Interest only mortgage – this is generally suitable for those people who have a substantial net worth. It is a mortgage where there is no underlying policy to guarantee the loan – there is a first charge on the property on which the mortgage is taken. You will only be paying interest on the loan monthly, so your current outgoings will be reduced – BUT you must be in a position to repay the totality of the loan at term. The loan to value for this produce is generally 80%, with a payment term of 7 years to 20 years, early repayment is possible.
    Interest and repayment loans but with a fixed interest rate on the repayment for 2 or 5 years – this enables you to budget your finances knowing that you have the rate of monthly repayments fixed for a period of 2 or 5 years – after which the loan becomes variable- attention should be paid in the case of an interest rate fluctuation during the term of the fixed rate interest period as this may affect the term of the loan.
    Endowment Mortgages – you will pay only the interest portion of the loan to the finance company but will be required to take out a life assurance policy (agreed by your lender) that will support the capital repayment of the finance at term. You will therefore in this instance be paying monthly interest payments to the mortgage company and also payments to support the life assurance policy. You can borrow up to 100% of the value of the property for a term of between 7 and 25 years. You can also reduce the capital of the loan by early lump sum repayments. Be aware that there may be a shortfall of funds at term, depending upon the prevailing financial market.
    Bridging loans in Catalonia for Catalonia property - now offered by many lenders and assists those who need to bridge their finances between the sale of their existing property in Catalonia and the purchase of the new property in Catalonia, loans will generally be for a minimum of 75,000€ and for a maximum term of 2 years. Careful consideration should be taken before entering into this type of proposition – current market conditions etc – otherwise you may find yourself at term of this loan with 2 properties and 2 loans.
    Fixed rate loans – offered at a loan to value ratio normally of 85% – the interest rate is fixed for the term of the loan – caution should be applied as in the case of a fall in interest rates you would not benefit from any savings (as you would in the case of a variable interest loan) as the term of the loan would have already been fixed. The term of this type of loan is in general from 7 to 20 years.

It should be noted that terms and conditions vary between lenders. Currency flunctuations between the euro currency and non euro currencies may cause loans to increase and your property may be at risk should you not make the specified repayments.

Mortgage Procedure:

    Choose you lender and ensure that your circumstances are acceptable to their criterion for loans
    Find your property, sign the Compromis de Vente this is the contract to purchase prior to signing the Acte de Vente with the Notaire - ensure that you have the clause written into the contract that the purchase is dependent upon you obtaining mortgage finance. You will regardless of this clause have a 7 day cooling off period in which to change your mind about the purchase of the property.
    The Notaire – It is mandatory that property purchases / transfers in Catalonia are dealt with by a Notaire, an independent public official, whose role is authenticate all deeds and documents and to ensure that the transaction is carried out correctly. When you are at the stage of the Acte de Vente before the Notaire it will generally be 3 months after the signing of the Compromis de Vente. As the purchaser you have the choice of which Notaire to use.
    Taxes and Legal Fees (as opposed to agency fees) involved in property purchases vary but as a rough guide budget between 8% and 10% of the value of the purchase price. The legality, is as stated dealt with by the Notaire who will account to you the purchaser after all documents etc have been files and deposited at the various property registers. Please note this can take some time – allow a good 12 months.

The information contained on this web site is merely a guideline and you are advised to seek independent financial advice.

For Catalonia Mortgages contact LandBank Mortgages, recommended specialists in Catalonia property purchases.100% Mortgages available on selected properties through The Catalonia Estate Agency.

Information on opening a French bank account (what documents to provide), the debit card and setting up debit orders. Information includes a sample of how to write a French check and an explanation of the RIB and TIP. Also: banking jargon guide.
Note: Many banks in France have regional English-language websites with English-speaking staff, and services and facilities in English at certain branches.

For explanations of French banking terms see: French Banking Terminology
Major French Retail Banks
The major French banks are:

Allianz Banque
AXA Banque (Internet banking)
Banque Accord (Internet banking)
Banque Populaire (some regional websites are in English)
Banque Populaire de la Côte d'Azur International Branch (all English-speaking)
Barclays France (website in English)
BNP Paribas
Caisse d'Epargne
CIC
Credit Agricole Crédit Agricole runs a service for UK residents relocating to France, Britline
Credit Lyonnais
Credit Mutuel
Credit du Nord

HSBC France
ING Direct (Internet banking)
La Banque Postale
MonaBanqu (Internet banking)
Société Générale
Opening a French Bank Account
A foreigner who is (or is going to be) resident in France for more than three months may open a French bank account (compte bancaire). A foreigner who is not (nor is planning to be) resident in France may open a non-resident's account (compte non-résident).

The compte non-résident
Not all banks have provision for a non-resident's account, and others impose restrictions on who may open an account, based on their place of residence (it is generally easier for EU-residents than those in non-EU countries) the minimum opening balance and other factors. Some banks have facilities for an account to be opened from outside France.

Documents required to open an account may vary but generally include proof of residential address (a recent utility bill) and proof of identity.

A French resident's bank account
A foreigner moving to France may open a bank account. Most banks have a variety of account types, with day-to-day banking usually being handled through a current account (compte à vue, also called a compte de dépôt à vue or a compte chèque).

These documents are needed to open an account:

EU citizens: Proof of identity (a valid passport or ID card)
Non-EU citizens: Proof of residence (Carte de séjour)
Proof of a French address: a utility bill, rental agreement or property deeds
Proof of earnings or status: Contract of employment/proof of earnings/proof of status (example: a student card)
Reference: from other banks where accounts are held (usually only required for loans and overdrafts)
In some cases, a birth certificate
Opening an account can be done in a day and methods of making payments (cash cards and cheque books) will usually arrive within a week to ten days of the account being opened.

Accounts may be held in joint names.

Note that an account held by two parties will have the words "et" or "ou" between the names. In the case of an account held in the names M et Mme Xyz, both account holders must sign a cheque, while in the case of an account in the name M ou Mme Xyz, either account holder may sign.
French banks will charge for certain items, for example in some a fee is payable to have an account, there's a fee to have a card (and second card), there may be a charge for the Internet banking facility and for transactions in certain banks.

Using a French Bank Account
Depending on the type of account chosen a cheque book, and payment and cash withdrawal card (the carte bleue - or "blue card") will be issued.

Reading and writing numbers in France
When writing or reading French numbers, it is important to know the placement of points and commas.

A point marks the thousands, while a comma separates the cents: one thousand Euro is written €1.000,00 (mille euros)
A comma marks the fractions in a percentage: fifty-two point six percent is written 52,6% (cinquante deux virgule six pourcent)
Card Payments
Card payments by carte bleue are accepted in most places in France. Payment is made using the PIN code; signatures may be requested over a certain amount
Look for the CB (carte bleue) Visa or MasterCard symbol
Note that the the CB is a debit not a credit card
Cash machines, ATMs (distributeurs) are easy to find in most towns and villages and are straightforward to use (being much the same as elsewhere in the world): enter the card and follow the text instructions. Many machines allow for the option to select English-language text
There may be restrictions on the use of an account when travelling outside the département where the account is held; speak to the branch to make arrangements.
Cheques
Photographic ID (for example passport or driving licence) may be requested when paying by cheque.

Paying by personal cheque does not incur additional charges in France; however, a fee is charged to use a bankers draft (Chèque de Banque).

Cheques are accepted as a cash payment. French law makes a cheque equivalent to cash; it is therefore illegal to write a cheque if there are not sufficient funds in the account to cover the payment. If a cheque is written that the bank cannot pay because of lack of funds, the bank is obliged to report it to France's national banking authority, the Bank de France, which can impose an interdit bancaire which forbids the account holder from using cheques for five years.
A cheque can only be cancelled if it is lost, stolen or if there is a suspicion of fraud
It is illegal to write a post-dated or open-dated cheque
A cheque is valid in France for one year and eight days (12 months, 8 days).
When receiving payment by cheque, always write the account number, bank code and sign the back of a cheque before depositing it.

As a chequebook nears completions, the bank will send another one if a form requesting automatic renewal has been filled in. Postal fees are charged for registered delivery. Renewal can also be made by filling in the form provided in a chequebook. Collection can be made at the branch.

Completing a French cheque
French cheques should be filled out in French.

RIB: Relevé d'Identité Bancaire
On opening an account, the bank provides several copies of RIB (Relevé d'Identité Bancaire). This is a form which establishes the bank references and account details and identity. It contains the numéro de compte (account number) the code de l'établissement (bank code) and the code du guichet (sort code).

RIBs are requested when establishing regular contract payments by automatic debit on an account (prélèvement automatique) for example, for the payment of utilities. RIBs are also used when setting up automatic payments into an account, for example Social Security, Family Allowance benefits or salaries.

A RIB is also needed when taking out a contract where monthly payments by TIP (see below) are required.

There are usually about three printed RIBs in the back of a cheque book. Printouts of RIBs can also be made from a cash machine, or via the Internet banking facility.

TIP: Titre Interbancaire de Paiement
A TIP (Titre Interbancaire de Paiement) is the authorised permission to debit an account of the sum asked for by the provider (for example EDF, France Telecom or the Tax Department).

The TIP replaces the use of a cheque, and comes attached to the bottom of the invoice (facture). The first time an invoice is received, sign it and enclose a RIB in the envelope provided (there will be printed instructions). The next invoice amount will automatically have all the bank information printed on the TIP and needs only to be signed, dated and posted off.

web: www.landbankmortgages.com

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