Broker mortgage in advance

We think we might be able to knock a few thousand off the cost of a house if we can buy quickly. Do we need to find a property before we ask for a mortgage or could we sort out a provisional agreement with a lender up to our top budget and be ready to snap a bargain when we find it?

Over the past couple of years, the concept of getting an agreement in principle has grown in popularity. The reasons are twofold. First, it is becoming increasingly important for serious French second-home buyers to have the peace of mind of knowing they have the funds in place to complete their purchase, particularly given the recent financial turmoil and changes in lenders’ criteria. The other advantage is it puts you in a strong position to negotiate with the vendor.

If the vendor knows you have the funds in place to complete the purchase quickly it puts you in the same position as a cash buyer.

Furthermore, because you have had the foresight to apply for your mortgage in advance, it marks you out as a serious buyer.

An agreement in principle is straightforward to obtain, but many lenders, if approached directly, may say it is not possible. The simplest approach is to use the services of a good French mortgage broker.

What is more, if you approach a lender directly, they may simply give you an idea of the rate you would be able to obtain without confirming you fit the criteria for the mortgage product in question.

The process for obtaining an agreement in principle is uncomplicated. Essentially you will need to submit a completed mortgage application form to the lender along with the paperwork required to prove your income, proof of address, etc.

The lender will then agree, subject to final valuation of the property to lend you a certain amount of money. For the mortgage offer to be issued, you will need to submit any outstanding paperwork (such as the compromis de vente) to the lender.

There’s no need to tell the vendor the level of borrowing that has been agreed. All you are doing is 1, highlighting you are a serious buyer; 2, showing you have money in place to complete the purchase and 3, showing you can move very quickly (because most of the work on the mortgage has already been done).

So, if you are negotiating with the vendor and they have another offer from someone who is not able to confirm they have the funds in place, it puts you in a stronger position.

Either way once you have found your property you will be in pole position to move forward as quickly as possible and complete your dream purchase.