Expats Finding It Harder To Get Mortgages In France

French banks saying “non” to non-resident Expats looking to buy homes in France

London, UK (Pryce Warner International) January 6th, 2012 – Banks in France are tightening their conditions for offering mortgages to non-residents seeking to buy property in France.

Expat borrowers without large deposits or with insufficient income are being most heavily affected. But it is not just Expats having their mortgage requests turned down; more and more French nationals are suffering the same problem.

This may be partially explained by the increase in French house prices, 8% this year compared to the UK’s drop of 4%, and also the fact that the credit crunch and sub-prime mortgage problems were not as pervasive in France as elsewhere.

The main obstacle Expats are facing though is from one of the principal lenders to Expats in France, BNP Paribas. The bank has recently changed it’s mortgage range for non-residents and is reducing the loan value for that group from 80% to 70%. Changes have also been made to the amount that non-resident borrowers can have and the term length of interest only loans.

In some cases lenders are refusing to lend individuals funds even if they fall within the previously common limit of 33% of gross income to fund a mortgage.

French banks claim that this is part of a new culture of caution and part of an attempt to strengthen their creditworthiness.

Despite this French mortgage rates remain relatively strong. Residents are able to agree fixed term rates of 4.4% over 25 years and there are also deals where individuals will never have to pay more than 4.5%.

-------------------------------
By Aneil Fatania
Financial Editor
Pryce Warner International Group
For any corrections of factual information contained within our news items please contact our editor.
Email: af@prycewarner.com
Skype: newsdesk-pwi
Management Contacts
Telephone: U.K.- +44 20 3364 5016 or Monaco - +377 97 97 29 22
Subscribe to NEWS