France has long been one of the most popular countries with British retirees who are going in search of sunshine in retirement as well as a laid back and healthy lifestyle. What’s more, it’s a popular haunt with those who want a holiday home abroad and has been considered an excellent place for investment property seekers too…
However, France has certainly not avoided the effects of the global financial crisis, and at the current time there are many on the continent who are personally feeling the effects of the credit crunch. Those who have assets in more than one country and who need to consolidate may be being impacted, those who have a euro mortgage and a sterling income may be seeing their monthly payments rise, and anyone who is facing job insecurity and who has an outstanding balance to find on their French property may very well be worried about the potential reality of repossession.
In this article we take a practical approach to avoiding the repossession of property in France so that if you’re aware you have financial demons lurking, you can face them right now and prevent the humiliating and devastating loss of your home.
The way the world is at the moment and the way property markets have slumped, it is a cold hard and cruel fact that increasing numbers of people will have to face the reality of repossession of their home in the coming months. As jobs are lost, pay packets are cut, exchange rates falter and banks become jittery and more likely to call time on loans, so many people will have to look hard at how they are going to keep a roof over their head – whether that be at home in the UK, or abroad in a country like France.
Facing Your Property Finance Issues
The very first thing you need to be aware of is that you are going to have to face your problems and fight hard to get through. If you take the approach that most people take when facing financial difficulties and you ignore what’s going on in the hope that it will go away, you are statistically far more likely to lose your French property. If you believe that things are getting tighter and harder to manage financially speaking, but you are not yet in arrears, here are some things for you to think about: –
1) Could you sell your property in France at a reduced price, thus making it attractive to buyers and very quickly saleable, and earn enough from the sale to pay off the bank?
2) Could you let out your property either long or short-term and use the income you generate to supplement your mortgage payments?
3) If you live in your property in France full time, what about inviting paying guests by making part of the home into a B and B or by letting out a room to a lodger? No, of course this suggestion is not pleasant or ideal…but if it makes the difference between you keeping or losing your home, surely it’s worth considering.
4) Is it possible for you to take on another job to earn more income, or, if you have lost your job and are struggling to find another one, what about temporarily working in another field in any job going just to make ends meet. Whilst this may not be in your career plan, neither was a global recession! I.e., we are all having to adapt to circumstances in order to survive.
5) They say that ‘pride comes before a fall’ – therefore it is time to swallow yours and perhaps ask your family if they can help you out. If you have exhausted all avenues to bring in any more income to pay your French mortgage, surely your family would rather you turned to them for help than you faced the repossession of your home?
What to do if Repossession is a Reality
If you have already started to have problems paying your mortgage or are aware that you will be facing a long-term shortfall each month, you absolutely have to contact your lender. By avoiding the inevitable and failing to face up to your responsibilities, your bank will have no faith in you and will not feel in any way obligated to support you. Now, at this point it is worth mentioning that all processes and procedures in banks are regulated and regimented and supplemented by computer generated, soulless letters which, when they arrive through your letterbox are perfectly worded to have you burying your head in your hands. No one who wrote the letter knew you or your circumstances – the letter is not personal so don’t take it personally! But don’t ignore it either!
Read and understand the terms of any correspondence – and then get on the phone and try and start a personal dialogue with a human who may be able to help you! Back up anything that is agreed or discussed on the phone with written confirmation of facts, note down times and dates of phone calls, reference numbers given and the name of the person you have spoken to, and discuss the options you have which may include any of the following: –
1) take a repayment holiday break from the mortgage and only cover the interest payments for a set term
2) reduce the monthly amount you repay by extending the term of the loan
3) suspend all payments for a fixed term.
Because of the state of the global financial marketplace, there is little you can say that will probably surprise your lender, and what’s more, because of the way things are at the moment they probably really don’t want to repossess your home – all they want is money flowing in to honour your ‘debt’ – so if you can open and maintain calm dialogue, not take any of the intimidating letters personally and keep presenting the bank with options, chances are you will find a solution that you can both live with – at least for the short-term.
Otherwise, think seriously about selling your property before you are either forced to, or the bank take possession of it and sell it for any price at an auction – after all, they won’t care what price it fetches at auction, because if it does not make enough to cover the debt and charges they add on top, you will remain responsible for outstanding sums of money.