Expat clients often ask us whether French mortgages for expats are difficult to get, so here are the facts you need to know.
French Mortgages for Expats – The Facts
Overall, most applicants find the French approach to mortgage lending slow and strange.
Firstly, French underwriters normally take around 14 weeks to process an application.
Secondly, they don’t rely on credit scores but instead personally audit the applicant.
Finally, you will have few product or lender options. Most French mortgages for expats originate from only 1 or 2 lenders.
French Tax Status
An expat should first consider their tax status.
Can you claim French tax domiciliation? If you can things immediately get simpler.
As an expat, you are unlikely to pass the French tax domiciliation test, but there are advantages if you can.
You are French tax domiciled if you made you latest tax return to the French tax authorities. If you are, you are potentially eligible for a 100% LTV loan. You can also apply to borrow to pay the notaires fees.
You are not French tax domiciled if you made your latest tax return to a tax authority outside France. If you are not, the maximum is 85% LTV loan. You will also not be able to borrow to fund the notaires fees.
Dealing with French Banks
There is no legal reason why any French bank will not lend to an expat. That said there is a very strong practical limitation. If your supporting documents are not in French, the bank’s underwriters will not officially understand them.
The banks that lend to expats have multilingual underwriters experienced in working with foreign documents. These underwriters will be far easier to deal with and save you paying for court approved document translations. Most importantly, the French regulator allows these teams to work with documents in a foreign language.
French Lending Culture
French lenders, and the law they work under, is based on the Code Civil. There is a helpful, but not legally binding, translation of the Code Civil available.
French law requires a lender to comply with many specific terms and conditions setting out Product Details which are explained on our Consumer Guide page. Though most of these are simple, clear and logical the net effect can be that the application process can seem unduly slow and laborious. 14 weeks is the typical time a French lender will take to process an application. The slowest application we have ever had took the bank 19 months to complete, but we won in the end!
A Flavour of French Banking
The following Asterix video will give you a real feel of how banks in France operate! Don’t take it too seriously, it’s not a case study but it will help you understand the advantage of choosing the Best Broker to help you get the property finance you need.
