International Mortgage Qualification in France & How it Works
FRENCH MORTGAGE MARKET IN 2023.
It is widely reported that nearly 50% of credit applications in France were denied in 2023. This significant figure primarily reflects first-time buyers aged 30-55 seeking to acquire their primary residence.
International clients looking to purchase a secondary residence or investment property overseas with a financing contingency may face added hurdles compared to local residents. The increased barriers underscore the importance for non-resident borrowers to seek expert guidance and establish a clear strategy to save time and resources.
MORTGAGE QUALIFICATION.
The finance attestation is not obligatory, but it serves as an indicator to the agent and seller that the borrower is well-prepared. This document offers a transparent insight into the borrower’s capacity to borrow and the available personal contribution.To validate a non-resident financing request, a reputable mortgage broker will seek the following information:
- Confirm holding structure and borrower(s).
- Copy of identification for all borrower(s).
- Confirmation of the borrower(s) residency.
- 3 years of income verified by an independent chartered accountant or attestation from employer with supplementary information (payslips, work contract, bonus scheme etc…).
- Evidence of personal contribution or liquid assets (bank account savings, investment portfolio etc.).
- Personal financial statement confirming the borrower(s) assets and liabilities.
- Identify currency variations and potential risk.
- Mortgage insurance or covenants associated to loan facility.
- Property location – each lender applies an LTV.
- Property condition – subject to independent survey and valuation (above €2,000,000).
European banks offering financing options for non-residents demand a transparent overview of the borrower’s global financial standing. Generally, these banks lack a sophisticated underwriting process, making them potentially unsuitable for entrepreneurs or business owners with a budget below €2,000,000.
EXPERTISE & KNOWLEDGE.
Purchasing a property overseas is largely unfamiliar for international clients; so, it’s important for borrowers to be well informed of the financing options available:
- Obtain a qualified status with attestation de financement from a reputable mortgage broker.
- Build confidence with property finders.
- Budget for your overseas property.
- Save time, money and resources.
KEY POINTS.
- Avoid time wasters.
- Protect your company’s reputation and personal brand.
- Showcase quality over quantity.
Fortier has observed a notable surge in client advisors actively seeking a more comprehensive understanding of the buyers’ financial situation upfront. This is becoming increasingly crucial before making an offer or, in some cases, prior to scheduling a property visit, all contingent on the prospective buyer’s budget. This shift underscores the growing importance of transparency in financial matters within the real estate transaction process.
IMPORTANCE.
Private client advisors frequently encounter resistance when addressing the financial situation of the borrower(s). If the borrower lacks online visibility regarding their source of wealth, business interests, and openly lacks a clear narrative, it is advisable to request:
- Confirm provenance of funds (TRACFIN).
- Security and privacy of seller(s) is important – qualified buyers only.
- Subject to finance – seek expert guidance before viewings.
- Super prime assets will not entertain viewings unless the client is qualified.
In all cases, as an independent mortgage brokerage, we assist international borrower(s) find a financing solution and we are experienced deal makers for complex situations.
