Mortgage Case Study

Mortgage Case Study

Tell us a bit about yourselves.

Dave is a yacht captain and is at sea most of the summer months, so we want to make the most of the precious winter months we have together. Until last October, I [Nicola] was still based in Godalming, Surrey, but Dave's yacht is based in Antibes, so we really weren't seeing each other much, which isn't an ideal start to married life – we tied the knot last November. We decided, therefore, to relocate to Antibes, where we could have a proper base together. I'm self-employed and can work from home. We're in rented accommodation at the moment.

Tell us about your overseas purchase.

We saw about 18 properties before deciding on a modern two-bedroom flat on the border of the new and old parts of Antibes. It's very spacious, with an open-plan living area, an American style kitchen, two double bedrooms and a large bathroom. We looked at a selection of traditional and modern homes, but liked the fact that the flat needed no work, yet was still located on the edge of the old town, which is a lively area. From an investment perspective, we feel that it will have good rental prospects in the future, especially as it's close to all the local amenities.

How are you financing the purchase?

The flat cost €270K (£241,500) and we put down a deposit of 10 per cent, which means our mortgage is €243K (£217,300). Interestingly, the asking price for the flat was actually €325K (£290,700), but we decided to make a low offer, and eventually agreed on a price that was nearly 20 per cent lower than the original. So there are definitely bargains to be had. We decided to go for a euro-based mortgage as the deals on offer were more competitive than the sterling-based alternatives. We're on a tracker rate of 3.80 per cent for the first three months, and then 4.60 per cent variable. Although I'm still paid in sterling, Dave is paid in euros, so we'll use his salary to service the monthly repayments, which means we won't be at the mercy of fluctuating exchange rates and the associated costs. We chose to go with a locally-based lender – as opposed to a UK lender – as it was more willing to lend on a 90 per cent basis, and with a good rate. The term of the mortgage is 25 years and it's on a repayment basis.

Do you have any advice for other readers?

I would definitely advise them to be brave when it comes to negotiating price. With the economic climate as it is, people are keener to sell and therefore more likely to be receptive to offers lower than the asking price. Going through a specialist broker like Conti also really helps. As it's independent, it can give a broad range of choices and source the best possible deal for you. It understands the mortgage processes of the country in question, which can be very different from those in the UK, and guides you through the whole procedure. And it avoids potential language barriers. I'd also advise readers to take nothing for granted! Each country has its own specific processes, and different cultures have different expectations and norms. In France, ensure that your notaire explains the entire process to you, from the original offer to receiving the keys. They should also clarify what is expected of you and when. A good understanding of your responsibilities at the outset will make closing the deal a lot smoother and less stressful.

Author

A Place In The Sun