Faire racheter son pret immobilier, part 2

So assuming you answered yes to all of yesterday's questions, and you've done your simulation online to make sure the gains are there, it's time to think about how much this is going to cost you.

Depending on how much money you still owe, you will have at least a couple thousand euros in frais de dossier for this process - both to your old bank and your new bank, for the early reimbursement penalty, and for the new caution bancaire.  The bank won't tell you this, but if you've got the money saved up, you can pay these expenses out of pocket instead of having them included in your new mortgage. You will need to specify this when you apply however, because otherwise the bank will automatically include it so they get that extra interest.

This is also a good time to look at your mortgage insurance, and to see if there are opportunities for savings there, or if you want to change your percentage of coverage.  Initially C & I were both at 50%, but he wanted to go up to 75% this time due to reduced income and some of the crazy places I travel to.  Don't forget that you are not obligated to chose the bank's insurance, you can also go with a third party for oftentimes much cheaper.

Lastly, you need to decide if you want to keep paying the same amount (or more) and shorten the length of your mortgage, or if you want to keep the same duration and lessen your monthly payments.  Keep in mind though that most banks will still want you to stay around a monthly payment of 30% max of your total revenue.

After that, it was only a matter of choosing which banks we wanted to contact.  The application file was fairly easy to prepare - it mainly contains everything you had to provide when you applied for your initial mortgage, plus some more recent fiches de paie and avis d'imposition, so it just takes time to make all those photocopies plus a lot of ink.

During your meetings, you can also ask about negotiating their frais de dossier (most of ours put it initially at 1000€ and dropped it down to 500€ when we asked about it), and to see if you can negotiate any discounts on your monthly banking fees, assuming you will be required to move all of your accounts to their bank.

Once you've had all of your meetings with the various banks, it will take them around 2 weeks to get back to you.  If they decide to extend an offer, you will have to wait a minimum of 10 days (and a maximum of 30 days) after receiving it before signing and returning (similar to when you signed your original mortgage).

And that's about it in a nutshell.  Hopefully this has been helpful - and really a lot of this information applies as well if you are currently house-hunting.  So even though it's time-consuming, it's definitely worth it - this process will have allowed us to save nearly 30,000€ total!

Faire racheter son pret immobilier, part 1

This is a post for those of you who are lucky enough to own a home in France (and unlucky enough to still be paying it off lol).  If you haven't heard yet, interest rates in France are at historic lows.  Like so low, the banks are lending money almost for free, at least when you take inflation and the yearly value your bien will gain into account.  It's true that they've gone back up slightly in the past month or two, but it's still a steal if you've got a mortgage or you're looking to get one.

Just to give you an idea, when we signed our mortgage 2 years ago, we also got one of the lowest rates France had seen in a long time - 2,85%.  Now we are going through the process of refinancing our mortgage, and we just received an offer at 0,95%.  So I thought I'd share a few things we learned along the way. 

Initially, we'd planned on paying down a significant amount of money in cash that we've managed to save up over the past few years.  Being mortgage novices, we assumed we could pay off the lump sum and then refinance for a lower amount. After nearly a three month wait, we found out this was not the case and we lost out on the 0,85% interest rate.

If you want to pay money down, you need to first pay your current lender (and there is a small penalty fee that comes with it - I believe 3-6 months' worth of interest), and once that has gone through, you can then start the process of either renegotiating or refinancing your mortgage.  This will take a few months however, so you'll have to decide whether or not it's worth doing that and risking interest rates going up.

I'm mainly going to talk about refinancing here though, because very few banks will accept renegotiation (because what do they have to gain?), unless you have already done the work of finding a few other hard offers from competitors and you can force their hand.

First, there are a few questions you need to ask yourself:

1. Do you have more years left on your mortgage than you've paid back?  For example, for a 20 year mortgage, do you have at least 10 years left? 
2. Do you still owe a large amount of money?  (Some sites estimate this as 50,000€, some 75,000€)
3. Is there at least a 1% difference between your current rate and the rates offered now?
4. How much will your lender charge you in penalty fees? 
5. Do you have time to devote to the process? (It took C one full day to compile everything and then we had to have rather lengthy meetings with each bank). 

There are websites out there that can help you calculate all of this.  C was initially hesitant about the process given how time-consuming it was and how little time we both currently have, but it only took a quick estimation on MeilleurTaux to show him how significant the savings would be.

This is getting long again, so more on the next steps tomorrow!

You know, the funny thing was that C & I didn't really set out to buy an apartment.  Or at least not yet.  The truth was, we were still leaning towards doing a viager.  Actually buying an apartment just seemed so permanent, and who knew how long we'd stay in Paris?  

But we still decided to get a feel for the market, so like we did with our current apartment, we sat down and made a list of our desired features and neighborhoods, and then I set up a few SeLoger alerts to start to familiar with prices.

We got two hits almost immediately - one for a viager, and one to buy. We first visited the viager apartment, and it had the requisite view of the Eiffel Tower, but only from the balcony.  It was also missing the second bedroom we wanted, and it would need a ton of renovation were we to ever live in it.  The price was right and we wouldn't need a mortgage, but it was a bit outside of our search area.

The apartment for sale hit all of our criteria - more than 60m2, two bedrooms, great view, balcony, parking spot, good transport connections, limited reno needed, non-Haussmanian building, and it met our mortgage criteria.

So we decided to go check out.  We got lucky and were the first people to see it since the real estate agent was just coming back from her summer holiday. (Yes, that's how long ago this whole process started....).   C wanted to make an offer immediately after seeing it, I was a bit more hesitant.  After all, we weren't even really planning on buying an apartment, and certainly not in 2013!

But after thinking it over and realizing how rare it is to find a place to that checks all of the boxes (and I had all of the posts from "House Hunting in Paris" in mind), we crunched some numbers and decided to just go for it and put in an offer, which the seller accepted.

I'm mostly grateful that we have had so much luck both times around, especially given how much so many folks struggle to find a decent place to live in this city. Long-time readers may remember that we hadn't been planning on moving in together so soon either, but the perfect place came along right after I'd set up the search to get a feel for the market.  And now the same thing happens for this place.  Positive manifestation strikes again!

Ringing in the New Year

I can't believe it's the last day of 2013 - where did the year go??  It's been a busy but good year for us, and I am definitely looking forward to what 2014 will bring - my official "graduation" from my masters program, positive changes in my job that will hopefully mean less work, potentially a few trips to Asia, but mainly because.....

(no, there is no bun in the oven)

We bought an apartment!  We are super excited, and will sign the paperwork in two weeks, and then officially get the keys mid-February.  I've got a few posts in mind to explain how we went about buying it and some of the things to watch out for, but in the mean time, I am already picturing us celebrating NYE with this view next year!!