Are you an expatriate in Singapore and wish to acquire a second home in Paris? Or are you a non-French resident living in London looking for a rental investment in the provinces? Or more generally a French living abroad wanting to buy real estate in France? This article is made for you !
Acquiring a second home or a rental property in France as a non-resident, under a local or expatriation contract, is a path strewn with pitfalls.
Several thousand kilometers from France, even your favorite banker will not always be able to finance you.
Indeed, banks are less willing to make mortgages for expatriates than for French residents. But difficult does not mean impossible! To find out if you can be accompanied, make an initial estimate of your loan:
Non-resident: why don’t banks welcome you with open arms?
The priority is to analyze the solvency of your project. To do this, start by estimating whether you can borrow the capital necessary to buy the property you are interested in. Find out about the conditions relating to the granting of loans to non-residents. Banks are quite hesitant about this kind of project.
Your profile is considered riskier by banks
Granting a mortgage to a person whose place of residence is not in France is quite complicated in terms of procedures for French financial companies… In particular for monitoring the loan and repayments: your banker will have to do more effort to process your file.
Communication costs may be higher, because the distance has an impact. We must also take into account the time difference which makes things even more complex. The greatest fear for your banker will be linked in particular to the risk of non-payment and the difficulty of accessing your income and other accounts if necessary.
To more easily manage your non-resident mortgage file, we recommend that you go through the real estate broker box. As a credit professional, he knows the specific expectations of bankers for your file, and he will be able to highlight it. At Pretto, our Credit Experts are used to dealing with projects for expatriates or non-residents in France.
The country of expatriation determines your access to the mortgage
The conditions for granting a mortgage depend on the applicant’s country of residence. For example, a special agreement, called FATCA or Foreign Account Tax Compliance Acta, was signed between the United States and France to facilitate the exchange of banking and tax information between the two countries. This contract makes it possible to avoid tax evasion on a global level.
However, it requires French financial institutions to transmit the bank details of “US Person” who have an account of more than 500,000 dollars to the US government. Banks are therefore not so interested in recruiting this type of profile.
Investors who also live in one of the tax havens are not eligible, because it is difficult for the banks to really know the banking information of the person who wishes to have the credit, or even the true source of his income.
Your loan file is complicated to assemble
Financing for non-resident customers is a real specialization for banks, it is not a “classic” file. The documents that constitute the file of a non-resident are therefore not the same as for residents.
For example, in many countries around the world, tax is deducted at source. Banks must therefore analyze the tax-return in addition to your payslips (document for the reminder of the taxes paid by the person during the year).
Familiarizing yourself with emergency loans and their qualification criteria is vital, a process made more accessible with a reliable mortgage processing service provider. By leveraging their expertise, you can navigate intricate financial requirements seamlessly, ensuring a smoother qualification process and timely access to the necessary funds during unforeseen financial crises.
