Pacha1

Hi people, i'm new here so please forgive my ignorance, I have recently been looking with my partner for a B&B to run...
I work for myself and my partner works for a local construction firm in our city..

I would have around £160.000 to play with but would be looking at holding back about £60.000 for a rainy day and general living expenses to help get us through etc..

My question is, has anyone had to carry on earning back in the UK to get the Mortgage for their new business venture in France and then just used any of their rainy day money to get them through and pay toward the mortgage, or is there only the one way of actually doing it..

Thanks in advance..

dmu

Hi, and welcome to the forum!
Can't help on the Mortgage front, but would advise you to read the "Partner Status" thread in the "Read-Me: Moving to France FAQs" above.
If you're intending to buy property jointly, you should consult the Notaire for advice before signing anything, as couples not legally bound are considered as separate individuals in France and the Taxe de Succession is one of the unpleasant consequences. You don't mention children, which would complicate the issue even more. You'd also have to think about what business structure to set up for the B&B venture, as a Micro-Entreprise/Auto-Entrepreneur is for one person only.
Nothing to do with a mortgage (and even then, not sure how the banks or other money lenders deal with unmarried couples asking for a joint loan), but these are points to think about!

EuroTrash

No personal experience but the rule of thumb for mortgages and any kind of personal loan is that repayments cannot exceed one third of your disposable income, ie secure regular income minus any other loan repayments. This is set in stone by French law to control lending and prevent "surendettement". Banks will need to see full details of income and source, eg a permanent employment contract.

However if you're considering buying an existing B&B, unfortunately that would make it a business loan which anecdotally is a lot harder to obtain.

If you're intending to cover a € loan with a £ income you need to build in a good buffer zone in case sterling goes belly up post Brexit. I'm not sure how cautious French banks would be about this in the current climate but obviously they will be aware of the risks.

Each bank has its own criteria so all you can do is talk to one and if they turn you down, talk to another. There are also mortgage brokers. Overall I would say that French lenders are more rigorous than UK lenders, but saying that I have no recent experience of UK banks - last time I applied for a loan in the UK I came out with more than I'd originally asked for, and far more than I could afford! but they might have tightened up since.

Pacha1

Thank you for the information, as it happens I will be married soon so I guess that clears that..
Actually I was thinking of a house with separate gites possibly as we would be looking at a holiday home and then to rent out during the time we wont be there...
Not sure if this would fall under a regular mortgage or come under a different arrangement with the finance side of it..

Thanks for the solid intel, really appreciated..

EuroTrash

If a property that you apply for a mortgage on is currently registered as a gite business, then regardless of whether or not you intend to run it as such, you may find that your bank insists on treating it as a business transaction since technically you are purchasing a business.
If it's not registered as a gite business then even if you do intend to run it as one, the bank won't know this unless you tell them, and why would you tell them if they don't ask. Either way they wouldn't take potential letting into account, you would need to prove sufficient secure income separate from any future gite revenue.

EuroTrash

To be honest, if I lived and worked and owned a home in the UK and wanted to buy a holiday home in France, I think I'd try and mortgage the UK property and buy the French property for cash, if UK banks will allow this. Being very risk averse, the idea of having to pay off a euro mortgage out of a sterling income would make me very uneasy, I'd probably end up become an exchange-rate bore and checking the rates compulsively. A few percent this way or that can make a heck of a difference - ask any Brit who is living here purely on UK pension income.

Novocastrian

+1. Substitute Canada for UK and that's exactly what we did. In Canadian parlance it wasn't a mortgage but rather a Line of Credit secured against equity in the house in Canada. A line of credit is what it says on the tin, we could have used the funds for an around the world cruise as far as the bank cared. As far as the French were concerned we paid cash for the french house.

Novocastrian

It also occurs to me that £100,000 might be enough to buy outright in many more rural parts of France depending on where the OP is looking.

Pacha1

All very interesting, and most helpful....Well im taking the steps to remortgage and would be looking at walking straight into a ready made home with a few outbuildings I can convert, been in the building game I can hopefully get much of the work done myself..

Sound advice people.....and sorry for the delay, been working away so not been able to reply...