NewsletterMarch 2006

Upcoming:

• It's the time for traditional France to shine: the 26th Salon international de l'Agriculture (International Agricultural Show) takes place from February 26th to March 6th. For more info there is a site in English - Salon Agriculture.

Apartment Buying

As I stated last month we are in the process of buying an apartment in the nearby town of La Roche sur Foron. A little trivia, La Roche sur Foron was the first town in Europe to have electric street lights!

Right now we are at the stage of waiting for the okay from our bank. One very important thing I discovered is that it might be a sellers market when it comes to buying a home but it is buyers market when selecting a bank. Most banks will go out of their way to sweeten an offer. After visiting four banks we selected two we liked: Crédit Agricole (my wife’s bank) and Crédit Mutuel. We then played the two against each other to get the best deal. We were very open as to the deal each was offering.

We discovered that all banks get their Swiss Francs (as I stated last month because my wife works in Switzerland we are able to get a loan in Swiss Francs and thus have a lower rate than we could get in euros) at one of two exchanges: Paris or London. The difference between the two exchanges is very small, so banks can’t really control how much they pay for money. What the bank can control is how much it resells the money for. This is the bank’s margin, and it is negotiable. We were able to negotiate down the margin of our loan.

The next thing you can negotiate is the bank’s processing fee. We didn’t go with the bank with the lowest fees as the savings were made up else where.

The else where in our case was the Hypothèque. We selected Crédit Mutuel because we could buy our apartment without having to have a Hypothèque. Hypothèque translates to mortgage in English, but as I understand, it is really a contract between the buyer and the bank. If the buyer defaults on the loan the Hypothèque will then protect the bank against a loan default, i.e. pay off the bank and collect from the buyer.

I’m not sure who or what is behind a Hypothèque. A Hypothèque for us would have cost about 2,000 to 3,000 (the rates are set by the state) euros and if we were to sell our apartment before the end of the loan we would have to pay a percentage of the amount we borrowed to have the Hypothèque removed. This could be as high as 800 euros I was told. Also to add to the negatives of Hypothèques, it lasts 2 years longer than the length of the loan. Therefore if we were to sell a year after paying off our loan we would still have to pay to have the Hypothèque removed.

We were able to buy our apartment without a Hypothèque. Crédit Mutuel uses an ‘organisme de caution’ that acts as a Hypothèques but costs about half the price. Also, there is no penalty should we sell early. An organisme de caution as I understand it, is just a company that guarantees loans for banks. This was what made the Crédit Mutuel offer the best. Before the bank selecting process I knew nothing about a Hypothèque. I only found out because I shopped around.

New Web Site

I’ve created another airport web site, this time for the Avignon Airport. Like other web sites I’ve created this one is an ‘unofficial guide’ and offers the visitor practical information on airport access, hotels, airlines …

Living and Investing in France Conferences

Anyone thinking of moving to France should consider the Living and Investing in France Conferences organized by expat Adrian Leeds. There are two action packed conferences coming up: Paris March 17 - 19, 2006 and New Orleans May 26 - 28, 2006. Each will cover everything you need to get you on your way to living in France.

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