[observer123]

Hi guys,
Can US expats get a mortgage to buy a property in France?
If so, what would it take? Who is the best provider?
What are the mortgage rates, interest?

 

[Gypsycob]

If you Google "Getting a mortgage in France 2015" you will find a whole host of mortgage brokers touting for your business, saying how easy it is. In my experience though, things work very differently in France to the UK and the US; its more about your relationship with your local bank manager and your proven wage than you cherry-picking the cheapest company! Someone will be along shortly with more knowledge on the subject, but I fear that 20% is way short!

Gypsycob x

 

[Bevdeforges]

The first thing you'll need is a bank account in France. It depends on your status (visa, residence, etc.) whether you can get a regular bank account or a "non-resident" account, and I'll admit I'm not sure what the differences are between those types of accounts. But generally speaking, a bank will require you to have an account and some plan to regularly "feed" the account (salary or pension, for example) - as mortgage payments are usually taken directly from the account rather than waiting for you to write out a check.

There are lots of restrictions on lending here, so be prepared. For a mortgage property, the repayments cannot exceed 30 or 33% of your income. This page from Service Public explains the "classic" property loan: Prêt immobilier classique - Service-public.fr There are various programs (including a 0% down deal) but those may require that you have established your residence in France.
Cheers,
Bev

 

[Bellthorpe]

My wife and I were not able to get a mortgage. We have plenty of assets to cover the proposed loan, but no income in France. Hence, no mortgage.

 

[alicewaimea]

Could I ask what was the reason given? I thought that with overseas investment or retirement funds then retirees could get a french mortgage?

 

[Bellthorpe]

We're not retirees, and we have income. The reason given was 'we don't give mortgages unless you have French income of an appropriate amount to service the mortgage'.

 

[observer123]

My wife and I were not able to get a mortgage. We have plenty of assets to cover the proposed loan, but no income in France. Hence, no mortgage.

Do you have a business registered in another country? Or it's income from investment?

What would they consider to be "french income?". Should it be a business that is registered here, and has a bank account here? What if we are not residents, and live part-time in France, and running a virtual business?

 

[Bevdeforges]

Be careful about "living part-time in France and running a virtual business" - the criteria for being considered "tax resident" in France are pretty broad:

Sous réserve des Conventions fiscales internationales, vous êtes considéré comme domicilié fiscalement en France si vous répondez à un seul ou plusieurs de ces critères :

votre foyer (conjoint ou partenaire d'un PACS et enfants) reste en France, même si vous êtes amené, en raison de nécessités professionnelles, à séjourner dans un autre pays temporairement ou pendant la plus grande partie de l'année. A défaut de foyer, le domicile fiscal se définit par votre lieu de séjour principal ;

ou

vous exercez en France une activité professionnelle salariée ou non, sauf si elle est accessoire ;

ou

vous avez en France le centre de vos intérêts économiques. Il s'agit du lieu de vos principaux investissements, du siège de vos affaires, du centre de vos activités professionnelles, ou le lieu d'où vous tirez la majeure partie de vos revenus.

You only need to meet one of the three criteria to be subject to French taxation.
Cheers,
Bev

 

[Bellthorpe]

Do you have a business registered in another country? Or it's income from investment?

Yes, yes.

What would they consider to be "french income?". Should it be a business that is registered here, and has a bank account here? What if we are not residents, and live part-time in France, and running a virtual business?

Wages paid to us in France.

 

[alicewaimea]

I thought that getting a French mortgage with retirement income was possible for a US expat provided you had regular income deposits into a French bank over a period of time. Also perhaps paying a larger down payment. I have seen this referenced in this forum and elsewhere, that is why I wondered why you were turned down.

 

[Bellthorpe]

You're probably correct, but we don't have regular income deposits into France. At this stage, we've not elected to become French residents. Just to spend part of the year there. Our income is taken in other countries.

 

[alicewaimea]

I believe it is possible for a non-resident, it is probably the regular deposits that are blocking it.

 

[Bellthorpe]

There's not really any 'probably' about it.

As I said in my first post in this thread:

My wife and I were not able to get a mortgage. We have plenty of assets to cover the proposed loan, but no income in France. Hence, no mortgage.

But that would not be fixed by just transferring money to France on a regular basis. They want to see 'income'. A job. An employer (even if the employer is us).

 

[alicewaimea]

I'm not sure about that. I think that if you have regular payments from a retirement source, i.e. SS or pension into your French bank account that will work, with a generous downpayment of course.

 

[Bellthorpe]

Quite possibly. But in our case, as we do not have such a funding source, they would not consider our application. We have investment income, but it's not a regular payment(s) from SS or similar.

 

[alicewaimea]

Well, I wonder, perhaps it depends on the bank? I have more money in investment than SS so I expect to fund a mortgage through that. Although I suppose I could do the opposite if that is the way to play.

 

[Bevdeforges]

Well, I wonder, perhaps it depends on the bank? I have more money in investment than SS so I expect to fund a mortgage through that. Although I suppose I could do the opposite if that is the way to play.

I suppose the moral to this story is that it appears French banks won't grant a mortgage based solely on assets. Because mortgage payments are taken each month from your bank account, they want to see deposits from some source coming into said account on a regular basis. Or, I suppose, you could simply transfer enough assets to your French account to cover a few years of mortgage payments, too.

Credit here in France simply isn't as "loosey-goosey" as it is in the US and other places. All the banks can count on for repayment is what's in your account or what's coming in on a reliable basis.
Cheers,
Bev

 

[TOrner]

Short answer - yes it's possible to get a french mortgage for US expats in France who don't work. We got ours last Dec from Credit Agricole Normandy & the Britline. Their requirements were:
- we had to have our pension direct deposited to CA Normandy
- max outgo for mortgage payment 33% of income
- they only counted salary, pension and rental income; interest & capital gains weren't counted in their formula; the salary could be a US salary
- min down payment was 10%
- it needed to be owner occupied
- we had to purchase mortgage life insurance on at least my wife or I for the full amount
- they asked for other assets, but not sure if they looked at them much or not, only if they were not owned outright
- mortgage had to be paid off by age 70. So if you're over 50, the longest loan was a 15 yr note, or over 60, a 10 yr note.
- cost of mortgage was 1% or 1100euro max

Additional considerations in our favour:
- we'd been CA customers for 18 months
- I spoke with the CA Britline Mortgage Manager to prequalify and to ensure I had everything they needed to provide us a mortgage
- their rate wasn't the best, but it was definitely competitive, and when you're less than 2.5%, if doesn't make a whole lot of difference

Bon Chance,

 

[Bellthorpe]

mortgage had to be paid off by age 70. So if you're over 50, the longest loan was a 15 yr note, or over 60, a 10 yr note.

So for a couple the age of the oldest would determine the maximum length of the mortgage?

 

[TOrner]

CA actually used the age of the youngest. I suspect they figure if the oldest died, the youngest will still be around to pay. And they're still covered because the youngest will then have 100% of the credit life insurance.

One of the items that gave me the beef, was that I didn't shop around for the credit life policy, which of course CA didn't really encourage, since they sold the credit life policy thru a subsidiary. I could have saved 40% on policy premiums, if I knew where to look for the policy.