In Part 2 of this series, Oliver Phillips of PFS France (http://www.propertyforsalefrance.co.uk/) takes a look at common approaches to financing french property purchases.So you've found your perfect home, you know
area, people, and you've appointed your own Notary. You've also had an independent valuation and will be getting property surveyed to make sure you understand what you are buying?
Your next thought is likely to be financing? Generally, you might look to finance your purchase in one of two ways; either using equity in a UK property by way of remortgage or by taking out a second mortgage on French property. Both methods are subject to exchange rate risk but in different ways.
If you decide to remortgage an existing UK property finance would normally be raised in £GBP. Raising mortgage in euros may result in a fairly substantial foreign currency conversion or exchange fee to pay. Make sure you are aware of how much this will be. Secondly timing of your purchase is important. A weak pound against euro will inflate cost of your property, and require you raise a larger mortgage, but conversely a strong pound against a weak euro, could make remortgaging your UK home a cheap way to buy your home in France. However once mortgage is raised, you will always pay same monthly fee regardless of future exchange rate changes.
If you want a second mortgage on French property itself it might be possible to deal with a French branch of your British Bank and this is worth looking into. A euro mortgage with a French bank will always be for euro cost of property, so you avoid exchange rate risk on mortgage amount, but monthly repayments though same in euros may seem more or less expensive as euro exchange rate moves against pound.
