Business and Finance

MORTAGE INSURANCE AND THE NEW LAW “LOI LEMOINE”

In France, to get a mortgage to buy a house, banks do require that you take out a mortgage insurance which reimburses the mortgage in case you die before it is fully paid. This insurance is subject to a health questionnaire (more or less complicated depending on the amount and your age). Most of the time, you had no choice but to do it with the bank which offered you the mortgage (well, you could have but the bank would then refuse you the mortgage!!). However, fear no more as our government has now passed a law, the” Loi Lemoine” has come into effect on the 1st of June for new mortgages and 1st of September for existing mortgages. Here is how it works:

1) What is the Loi Lemoine: This is a law which states that:

a) As long as you are borrowing below 200 000 euro and that the mortgage is paid up before you are 60 years old, there is no health questionnaire allowed. That means that people who had been unfortunate enough to have a medical condition (being young mainly) can now purchase a house which they could not do before as they were refused mortgages as they could not get insurances for it. This is valid as of 1st of June for new mortgages and as of 1st of September for existing mortgages (in case people want to renegotiate and transfer their mortgage insurance or mortgage). This is also valid for loan insurance (the bank can ask for an insurance for a loan but it is not an obligation). b) You can now shop around for cheaper mortgage insurances at any time. Before this law, you had to wait for the anniversary date each year and notified the bank 2 Months prior. Now, no need to wait. This is valid from 1st of June for new contract and from 1st of September for existing one. On average, insurance companies are 20% cheaper than banks! And the cancellation can be done by your new insurer. c) “le droit à l’oubli”: The right to oblivion is changed from 10 years to 5 years for pathology of Cancer and Hepatitis C. So, on the health questionnaire, the insurance company can not ask you if you had cancer or Hepatitis C in the last 10 years, it is now only 5 years.

2) Mortgage insurance:

a) How does it work: Quite simple really, it is based on the amount you have left to pay back, your age, smoking status, occupation and sporting activities. A bit like a life insurance except it stops at the same time as your mortgage and the beneficiary is the bank the mortgage is with.

b) What does it guarantee: It covers the payment of what is left on the mortgage in case of death but also can be added partial or total invalidity (temporary or final), illness or even loss of job. The death guarantee can be for 100% or 50% of the mortgage. Depends on what the bank is OK with and also what your finances are like! The 50% is also possible if you are married and the mortgage is in both names. If one of you dies, then the survivor only has 50% of the mortgage left to pay. 3) Who with and how: Well obviously with me!! As we are a broker, we actually use 4 companies (Allianz, Metlife, Swisslife and Generali are the ones we use the most) that we find are cheaper and with more or less complicated health questionnaire (if necessary, now the law has changed).

For a free quote I need the details of your mortgage, so a document called “tableau d’amortissement” which shows the instalment amounts per Month or year left to be paid. I also need a copy of your actual insurance contract as it has to be the same guarantees as per the bank exactly. If you are happy with the quote, no worries, we do all the swap for you, so you have nothing to do. Conclusion: I swapped my mortgage from Credit Agricole to Banque Populaire in 2015. At that time, you could not shop around for insurance mortgage only, so, by swapping my mortgage from one bank to the other, not only I saved money on my mortgage, I also saved money as I was allowed to swap my insurance from the bank to Allianz as the new bank was OK for me to do it with someone else than them. I saved 2 000 euro!! Now that the system is easier, no need to change banks, just change the insurance.

This is also a great new law for people who had a long term illness or incurable disability to be able to finally own their own house! And remember to check out our web site www.bh-assurances.fr/en for all my previous articles and register to receive our monthly Newsletter. You can also follow us on Facebook: “Allianz Jacques Boulesteix et Romain Lesterpt”

And don’t hesitate to contact me for any other information or quote on subject such as Funeral cover, inheritance law, investments, car, house, professional and top up health insurance, etc…

No Orias: 07004255 Visit our web site

www.bh-assurances.fr

BH Assurances

22 rue Jean Jaures 16700 Ruffec

Isabelle Want

Tel : 05 45 31 01 61 Mob : 06 17 30 39 11 Email : isabelle.want@bh-assurances.fr

Making your money last as long as you do

by Catrina Ogilvie, Blevins Franks

Are you looking forward to enjoying your retirement year in France? This may be longer than you expect; thanks to medical advances over the years and a better quality of life, people are generally living longer than the previous generation. Living to a ripe old age does sound rather appealing, provided we are healthy enough. There are, however, implications at both personal and government levels, with the key issue being: can we afford the cost of living longer?

Income and inflation

Starting with the big topic of the moment – the cost of living. Even low levels of inflation, compounded year after year, will reduce how far a fixed income will stretch in the future. Let’s say you spend €5,000 a month. Assuming an inflation rate of 3% a year, in 10 years’ time you could need €6,720 a month to maintain the same spending, and €9,030 in 20 years. Your capital and income would need to grow by the same amount to maintain your standard of living.

Making your savings and investments last

Many retirees favour low-risk investments like bank deposits in their later years. But with a potential 30+ years to fund in retirement, this can be a risky strategy. By following some key investment principles and taking specialist guidance, you can invest capital to give it the opportunity to keep pace with inflation while keeping risk to a comfortable level.

A taxing problem – not just for governments

Rising life expectancy is expensive for governments. The higher the proportion of older people, the greater the costs of state pensions and healthcare – and with less taxpayers to fund it. The solution usually lies in pension/ healthcare reforms and tax increases. Higher taxation can be a threat to your long-term financial security– just like inflation it erodes your income. This is where personalised tax planning is vital to make use of available opportunities.

Getting the most from your pensions

Pensions are key to financial security in retirement, so take care to do what is right for you. Consider all your options, carefully weighing the pros and cons and looking at your income needs, investment options, risk, taxation, and what happens to the balance when you die. There may be ways for expatriates to make pension funds go further, but before making any decisions, take regulated advice to avoid pension scams and establish the best approach for your objectives and circumstances.

Leaving wealth behind

Estate planning is complex – more so for expatriates who have to consider the inheritance regime of two countries and navigate foreign inheritance taxes and succession laws. Whatever your stage of life, good financial planning can help you afford the lifestyle you want, for as long as you need, so you can focus on enjoying your retirement in France.

Keep up to date on the financial issues that may affect you on the Blevins Franks news page at www.blevinsfranks.com

With so many options for your UK pension funds, which is best for you?

Deciding what to do with your pensions is one of the most important financial decisions you make. Take regulated advice to understand how all the options and opportunities affect you, the tax implications in the UK and France, and what may change in the future. With our pension, tax and investment expertise, Blevins Franks provides bespoke, integrated advice based on your situation and aims. We get to know your situation before reviewing which solutions would work for you, from a tax and financial security point of view. Talk to the people who know

05 49 75 07 24

niort@blevinsfranks.com

www.blevinsfranks.com

141-fr INTERNATIONAL TAX ADVICE • INVESTMENTS • ESTATE PLANNING • PENSIONS

Blevins Franks Group is represented in France by the following companies: Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists. Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z. Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML.

Ask Amanda

Iam planning to move permanently to France but am not sure where to go for information on the differences in regulations regarding tax, inheritance and pensions between France and my current country of residence?

Whilst there are a number of forums and websites offering opinion and suggestions regarding the differences in French taxation from where you currently live, it is worth considering the following points before you make any decisions:

• What experience does the person/site/forum have in this field?

o Ensuring that the information you want is accurate, relevant to the country you will be living in and free of any personal bias and opinion, is vital in enabling you to make the right choices going forward.

• Is the information you will receive regulated in the country you will be living?

o Rules and regulations in the country you are leaving will most likely be different to France.

Making sure the recommendations you receive are based on what is best for you as a French resident is very important.

by Amanda Johnson

• Has the person providing you the information personal experience of your questions?

o It is always a comfort to speak to someone who has ‘walked the walk’ and not just a casual or second hand grasp of your questions. Personal experiences can often assist people getting used to new legislations and bureaucracy. Whether you want to register for our newsletter, attend one of our road shows or speak to me directly, please call or email me on the contacts below & I will be glad to help you. We do not charge for reviews, reports, or recommendations we provide

Amanda Johnson Tel: 05 49 98 97 46 or 06 73 27 25 43 E-mail: amanda.johnson@spectrum-ifa.com www.spectrum-ifa.com/amanda-johnson

The Spectrum IFA Group With Care, You Prosper

The Spectrum IFA Group is a registered trademark, exclusive rights to use in France granted to TSG Insurance Services S.A.R.L. Siège Social: 34 Bd des Italiens, 75009

Société de Courtage d'assurances R.C.S. Paris B 447 609 108 (2003B04384) Numéro d'immatriculation 07 025 332 - www.orias.fr Conseiller en investissements financiers, référence sous le numéro E002440 par ANACOFI-CIF, association agréée par l’Autorité des Marchés Financiers

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