Hello Simon
The French banks only ask for a vaulation - it is nothing more than that.
They are looking to see that the property is suitable and acceptable to them, and what you are paying for the property and the amount they are lending is fair. They are also looking to see that the property is 'habitable'.
The mortgage finance is based on the valuation of the property.
It is usual to establish the purchase price with the vendor (the person selling the property) at the time of making your offer.
The Compromis de vente is a legal contract and states full details about you and the vendor, the property, the purchase price, whether you are applying for mortgage finance, suspensive clauses (those are get out clauses), and the date of completion, etc, etc.
Obviously if there is something wrong with the property and/or it does not meet valuation, the bank will not offer the amount of mortgage finance you had applied for.
If you have the correct suspensive clause written in the Compromis, you can either walk away from the purchase without the loss of your reservation deposit, or re-negotiate the price with the vendor, in wihch case the Compromis will have to be altered and that may incur some extra cost.
And finally .... it is up to you to instruct your notaire to ask the bank for the mortgage finance cheque. Your notaire should ask for the funds at least a week before you complete on the purchase of the property.
I hope that helps you.
Carole Bayliss
mortgagefrance
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