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American mortgage for French property

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mditlove
6/17/2005 10:23 EST

Help! We want to retire to France; however with the current state of the dollar we would like to keep our nest egg here and get a mortgage here. If we could get a mortgage for 20% down, we could wait for the dollar to improve before exchanging all our money to euros.

So we are looking for an American bank, a French bank in the States, or a mortgage company here that would underwrite a mortgage for a property in France.

Any one know of any? Or is this a pipe dream?

Thanks,

Sandra & Michel

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iracathey
6/18/2005 12:25 EST

We were confronted with the same problem but decided that we needed to open a bank account in France anyway. That way, we could arrange to have our bills automatically deducted from our account, to have a carte bleu when we visited and so on. It has proved to be very convenient, even if we do occasionally take a beating when we wire money depending on the price of the euro. If you are interested in hearing our story, including the name of our French mortgage banker and other details, you can email us directly at iracathey@yahoo.com. Good luck.
Ira

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skovgaard
6/19/2005 04:13 EST

Sandra & Michel, First of all, when you write postings, please bear in mind that others cannot see where you are, and "here" can be ambiguous. Is "here" in the US or France? Presuming "here" is in the US, keeping your savings there is presumably a good idea, but I'm more sceptical about taking out a mortgage in the US for a property in France. Nobody can say where exchange rates are going, but given the chaos in the EU Union project and the associated euro currency, the euro could fall further. If the euro breaks up, a scenario that is not pure fantasy, I would expect particularly the French franc to go into free fall. Seen from the French side, your mortgage would in such a case become more and more expensive, and your debt would increase. It is often recommended to take the mortgage in the currency of the country where the property is. I'm convinced that the state of the survival chances of the euro in its present form are much worse than official sources admit, because it is politically sensitive, and they will wait until it has happened to admit that their political projects are falling apart. At that time, it would be too late to swap currency for the mortgage. The euro is a bomb waiting to explode in my opinion.

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Ferneyvoltaire
6/19/2005 08:02 EST

Sandra & Michel, I have to respectively disagree with Skovgaard. The Euro will not be abandoned and the EU will not be dissolved. Skovgaard must be a Euro Skeptic and thus is espousing his political wishes. Even if it did and the new French Franc "went into a free fall" (he was persumably referring against the dollar), a mortgage in the new French Franc would make it very much less expensive, not more expensive. In otherwords, you could get more French francs for each dollar and thus your mortgage payments would be less. Normally Skovgaard provides good information but this time he was dead wrong on all counts.

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mditlove
6/19/2005 23:13 EST

Thanks for all the comments and answers, Ira, we are definitely interested in hearing your story and getting the name of your banker etc., we'll email you.

What we're trying to do is find a bank in France that will give us a mortgage on a property and recognize our collateral in the US if we decide to keep it here.

We do have an account in France in Euros, but it's with CIC and they do not have branches in the US and could offer little help in that area.

Aside to Skovgaard: Yes, we're in the US, near Chicago.

Sandra & Michel

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skovgaard
6/20/2005 06:35 EST

How does Ferneyvoltaire know with certainty that the euro "will not be abandoned"? I expressed myself in conditional terms: "Nobody can say where exchange rates are going", "the euro *could* fall further", "*If* the euro breaks up, a scenario that is not pure fantasy, *I would expect* particularly the French franc to go into free fall". I very clearly did not say that the euro *will* break up but that it *could* happen. No one can say with certainty whether or not the euro will last. That has nothing to do with political views, but it should be noted that European euro-political correctness forbids discussing the subject. It is an economical possibility with a probability that very few people would want to predict. I didn't say or insinuate that the EU will be dissolved.

"a mortgage in the new French Franc would make it very much less expensive, not more expensive. In otherwords, you could get more French francs for each dollar and thus your mortgage payments would be less."

If ferneyvoltaire had paid more attention to understanding what I said instead of attacking what he thought was a political statement, he would have realized that this is exactly what I said. I warned against taking the mortgage in another currency than euro for the exact reason that both I and he says. In the event that the euro/franc falls against the dollar, the dollar value of the property would fall, while a dollar mortgage would remain unchanged. You might end up with a debt that exceeds the value of the property (negative equity). As I said, financial advisors usually recommend taking the mortgage in the currency of the country where the property is. Then, the value of the property and the size of debt will follow each other.

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mditlove
6/20/2005 12:23 EST

Skovgaard,

We did not mean to start a discourse on the future of the Euro, it was fairly obvious to us, and we apologize if we assumed too much, that a mortgage to buy a house in France would be in Euros and not dollars, regardless of what bank issued it.

The issue is to find a bank or mortgage company that will issue a mortgage on a property in France and accept collateral for that loan that happens to be in a bank in the US.

It's done all the time, we're told, but the problem we've encountered is that the midwest is fairly provincial and the banks here are not helpful when trying to deal with the rest of the world.

We can't even buy Euros in Chicago without days of phone calls to see who is doing it these days.

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oaksies
6/20/2005 13:12 EST

If you find such a bank, could you please let us know? We are looking to do something similar in Ireland. Our insurance/banker here told us it's just not a good risk for a company. hard to seize the property if we default, etc.

So, if you find one, please let us know!
Thanks

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skovgaard
6/20/2005 20:00 EST

No need to apologize, but your comment clarifies your question. There are people who consider taking mortgages in other currencies than where the house is, so I couldn't guess your position. So much the better if it's obvious for you. My intention was not to start a political discussion about the euro either, but the situation around the euro cannot be left out of a discussion involving exchange rate risks.
I'm afraid I can't help with a bank either. Within the EU "without internal frontiers", almost all French bank and credit companies that I asked turned down financing a car for the simple reason that I intended to buy it in Belgium; not France. Nothing to do with risk; I live in France. Provincialism - or are they getting underhand commissions from French car dealers?

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exparis
8/17/2005 12:50 EST

I have experience with this in France, it is not easy. My condo in Paris required 30% down and a complete physical. My house in Normandy required a $50,000 (in dollars, yes) in my BNP account blocked as a security.

I do recommend BNP and if you need a contact there I can help. They are reluctant to loan money unless you get with the international group within the bank, they are much more reasonable...

good luck

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Carltanlan
1/13/2006 04:37 EST

Have some American Friends who obtained a mortgage in France from GE Capital Bank, an American bank located in Neuilly sur Seine but they have offices elsewhere and some other American friends who got a mortgage/loan from Société Générale a French bank.
They all bought non-resident properties( apartments in Paris) and brought their documents from the US such as tax documents, income ,bank statements etc.
If you buy as a non-resident you must keep your property 15 years without selling it( you can rent it though) otherwise you will pay 37% capital gains.If you buy as a resident you just have to keep it 5 years otherwise you pay back the French VAT to the French Public Treasure.All this is to prevent people from speculating,( buying and selling 2 weeks later with a profit) we are told!

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provence
1/17/2006 06:06 EST

We are presently looking to purchase a flat in Paris and being USCitizens w/Dual EU Passports applied to GE Capitol and the process was riddled with errors on their, part. even losing the entire file. Now working with Credit Agricole with whom we have been banking for 30+ years and once again one week becomes three and still no firm answer and we are putting 80% down so how can thebank lose. All will hopefully work out but we may likely simply skip the mortgage and go for broke. Why said the "golden Years" are all fun? Will keep you posted.

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Brubaker
1/17/2006 13:25 EST

Hi, you might wish to try Abbey-National (recently merged with UCB). My wife (German) and I (US) live in Germany. We bought a house in France and used Abbey-National. It was so easy working with them it was practically a non-event--certainly one of the easiest parts of our purchase experience. Virtually all the administration was done via email and they assigned an English speaker to us who kept us apprised with frequent email updates. Easiest way to find them is to Google "Abbey-National France". Now if you want some real frustration, apply for a bank account with La Poste bank. Good luck, Scott

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BANSHEE
11/27/2006 15:24 EST

I would like to find an American 100% mortgage for a French property, is it possible?

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JOERVR
11/30/2006 11:07 EST

Mon ami, good morning from DC. I am in the International Real Estate business, and own 2 properties in France with 2 mortgages. The fact is that one must acquire a French Mortgage in France for property there...and must have a French bank account inorder to pay the payments via direct debit.
There is no American Bank who will finance overseas property...you may take an Equity loan out on your primary US property and simply pay cash to purchase the French property...
Good luck.
you can respond directly to me at joe.soileau@imoinvest.com or joervr@aol.com.
Joe

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pacafox
2/26/2011 11:36 EST

contact: www.gp-immo.com
our American-in-house mortage broker can help!

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nanosilver
3/4/2011 03:40 EST

Joe, thanks for a short and sweet answer to the mortgage question, This is the information that I received when I first explored this mortgage question.

About the fate of the Euro... all fiat currencies are going to face a day of reckoning soon. The dollar will likely be hit the hardest, since the past two administrations have spent more borrowed money than has been spent since the US became an independent country. One might want to study the Wiemar Republic and Zimbabwe for an example of what happens when runaway inflation occurs. If you are living in Europe, your assets would probably be better off here, converted into something of intrinsic value (real estate, precious metals, commodities, etc,)

Some of the more prescient financial analysts predict that dollars will soon fall to very low values. They present a compelling case for this. It is not popular on Wall Street or the mainstream media.

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Ferneyvoltaire
3/14/2011 18:14 EST

skovgaard, I was amused to reread your comment on the possibility of the abandonment of the Euro in 2005 when it's now 2011 and no one is speaking about the EU being disbanded and all countries abandoning the Euro. One of the reasons the Euro is here to stay is that most EU countries are in trouble including the strong economies because their banks loaned money to the banks in the weaker countries and bought the high yeild bonds of the weaker countries so they are all tied together. Nothing as big as the EU can sink entirely. The euro will lose value when the politicians finally face the facts but the union and the euro will continue. This is just my opinion.

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AnnieToth
5/10/2017 12:17 EST

Hi Sandra and Michel. My husband and I are also preparing to move to France and found a property to purchase so I am doing a bunch of research on this very topic and found you post. I'm curious as to how this worked out for you--did you borrow from a French bank and if so which one would you recommend? We are also in Chicago and hoping to move in the next 6-8 months. We found a home that we love and he is overseas looking at it right now. Thank you for any insight you have. Annie

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Lindesu
5/10/2017 20:36 EST

I am buying a small house in Brittany and have gone through the process of looking at financing options. We have excellent credit in the US but I was told by everyone that the could not make a real estate loan on a property overseas. I thought perhaps my best chance was with Bank of the West, simply because they are owned by a French banking group. But the subsidiaries are completely separate, so even that didn't work. There are a few French
companies that make loans to expats. I checked with several of them as well. However, what I learned was that they only make loans that are greater than €100,000.

So, in our case, because we found a 2 Bedroom, 1.5 bath house near our daughter, in the Breton countryside, it was a very good deal, only €40,000. Ultimately, I cashed out of a few smaller annuities to come up with half of the money, and I am taking out a signature loan of $30,000 to make the final purchase. I went through Bank of the West. I already had a credit history with them, and was able to bring the interest rate down to 5.99%. Its not as good as a true mortgage, but not bad for an unsecured, signature loan. And, they will loan up to $50,000 for any purpose.

This is how I am going to make my dream happen. Keep in mind that even if the property is listed through the notaire rather than a real estate agent (agence immoblier) you will still have some fees associated with the transaction. In my case, about €4,000. That's 1,000 for notaire fees and 3000 for taxes associated with the purchase.

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VictoriaPD
10/12/2017 17:15 EST

Has any American resident obtained a typical (10 to 20% down) mortgage with a French company/bank in the last couple of years?

We've had no luck with French Mortgage brokers (one refuses to work with American residents and the other insists on 40% down, which we don't want to do)

We are hoping it'll be better with an actual bank. Can anyone tells us about their experience? Is it even possible to get a 10-20% down mortgage anymore?

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