The 104% French mortgage

If you are looking for financing for your new leaseback project, the 104% mortgage product is one of the best financial products of the moment. Launched this July by a French bank, you only need to pay the bank fees. There are two options available with this product: repayment or interest only.

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Let’s take an example to explain how this product works. In Brittany, Sextant French Property offers a leaseback in Benodet. For €236,520 (VAT excluded), you can have a 1 Bedroom Apartment in a secured residence with sauna and heated swimming pool.
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Most of the time, when you ask for a mortgage, you receive a mortgage for 100% of the total amount of the leaseback property (VAT excluded)). In this case with the “104% mortgage”, you will be able to receive 104% of the total amount. That means it will cover the purchase of the property but also the legal and tax expenses.
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Thereby, to be able to buy this 1 Bedroom apartment in Benodet, you need to make a deposit of 5% of the value of the property (VAT excluded)) that is €13,492. You will get back this 5% deposit when you sign the deed of sales in front of a notaire. Consequently, you will only need to pay the bank fees: 1% of the total amount. That is €2,365 in the case of the apartment in Benodet. To be clear, your new property will only cost you the bank fees which means that you will just need to have this amount available.
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To sum up, here are the main criteria of the 104% mortgage:

– 5% deposit of the VAT price (back at the deed of sales).

– Mortgage on 104% (VAT excluded)

– Only need to pay the bank fees.
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To apply this 104% mortgage product, here are the main requirements to be eligible:

– Age: from 18 to 75 years old (before the end of the loan)

– Maximum debt/ratio: 30%

– Can be employed, self-employed or retired.

– If you apply for an interest only, you must have a side investment of 20%.
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This product is available for a shortlist of French leaseback companies. If you are interested, don’t hesitate to contact one of our Sextant Consultants on Sextant New Build Website. And if you are not eligible for this product, don’t worry! Contact one of our Mortgage Advisors by Sextant Mortgage Website since there will always be a mortgage adapted for your project.
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