French Mortgage lending in a post BREXIT world
It’s early 2021, we are all impacted by lockdowns and strict travel restrictions. Against all odds, Non-Resident buyers are still active in the French property market. Here is a brief overview of mortgage lending in a post BREXIT world :
- Overall, few changes as a result of BREXIT but some new pitfalls to be mindful of… The end of the EU financial passporting system has become a significant hurdle for UK intermediaries. EU lenders have taken steps to avoid being regulated by the UK FCA. More hoops to jump for British residents but nothing that can’t be overcome.
- Many individuals can’t get what they are looking for… Large disconnects between expectations and reality… Sadly, lending propositions do not meet demand
- Most lenders and insurance companies are able to accommodate a full remote origination process (No travel required). The most challenging aspect of processing a case remotely is often related with the mortgage Life Insurance application process. Undertaking medicals required by insurance companies can be challenging in periods of lockdowns and over-stretched health resources.
- Interest rates remain extremely low. No pricing for risk…. You are either in or out.
- Strict lending underwriting criteria… strong emphasis on affordability
- “Escape to the Château” may be fun to watch but won’t get lenders excited…. Gîtes, Fishing lakes, wedding venues etc even with the most robust business plans will have to be self funded
- Interest-only plans without collateral available up to 75% / 80% LTV
- Capital repayment plans available up to 85% LTV
- Duration up to 20 years. 25 years at a stretch
- Limited appetite for small amounts (<€150k), complex deals and non salaried applicants
- Lower rates available with Assets Under Management at ~60% LTV
- Lending to US persons still impacted by FATCA but some interesting propositions available
- Service is “hit and miss” and generally slow …. Depends on who you know. People trump processes…
- Private bank lending a good option for assets >€1m…. better service & expertise
Bluesky Finance is a France based independent specialist mortgage broker. We search and arrange high-quality mortgage solutions for international buyers. firstname.lastname@example.org + 33 (0) 9 82 56 61 57 More information