Why is it so hard to get a loan for non resident ?
Time & Difficulty
One of the main reasons non-resident will hear “no” to a mortgage is because of the large amount of time it will take to process all of the documents. On top of the time it takes to process all of the documents, is the added level of difficulty it takes to treat a case from an international buyer. The housing market has been booming all over the world since covid, therefore making time for everyone has become overwhelming. To add onto the document difficulty, each country has their own respective system and documents that are needed. In France documents that are typical here, are not typical and/or found in other countries. Furthermore with your documents, they will most likely need to be translated which takes additional time and effort.
Due to the difficulty & time of an international case, you need to find someone who’s willing to take it on. In most cases you just won’t find people who are willing. There are many other cases apart from the international ones that are much easier, much quicker, and generate more success than an international case would. This is why international clients typically end up buying in cash; it’s usually their only option. Willingness to do something also goes hand in hand with comfortability. There is a market that people are comfortable in and therefore their willingness lies in respect to their market – not to branch out, take the risk, and try something new. To go through all of these steps to later return unsuccessful is oftentimes just not worth it in their eyes. This is why usually these cases are left to specialists, or those with large sums of money who have the ability to pay in cash.
Working in English
Currently, only 28% of the french population speaks English, and this percentage declines with age. Now – this is not a jab at French people for not speaking English (for Americans are notorious for not speaking another language, as only 20% of the population is considered to be bilingual) nor should speaking English be an automatic expectation however, France is a highly sought after country that many people want to enjoy and invest in but aren’t able to in part due to that initial language barrier. Even if you speak a decent amount of French there are some things that are more technical that people would prefer to do in their native language to have a full understanding – in most cases for example, in the financial and in the medical field.
Access to Information
Access to information is arguably the most valuable thing one can have. The French system is difficult to work with, even if you’re french. So if you already have a language barrier, finding information is ten times harder than it already is. In the world of finance, nearly nothing is a black and white answer nor is a concrete answer readily available through a google search. Finding information also takes a lot of time, which people nowadays don’t have or don’t want to waste. To go through all of the hoops to find information, and then end up returning with a no is frustrating and stressful.
Banks are constantly changing their rules therefore, making it really hard to keep up with who is able to what and where you’re going to hear a yes/no. For example, BNP Paribas used to be the bank that a lot of real estate agents would send their international clients to, to obtain financing for their house because it was almost always certain that BNP would finance international clients. In April of 2022, BNP stopped financing international clients. Real estate agents and brokers alike were left a little clueless, and needed to scramble to find a solution. Another example is the recent acquisition of HSBC France by My Money Group. Not only has HSBC stopped international loans, they nearly stopped all loans in general for French people until the acquisition process has been completed; taking two years at minimum.
What We Do to Help
As mentioned above, international buyers are often stuck buying in cash. While buying in cash has its perks, leveraging your credit is often more preferable and better for your wallet in the long run. At MEA Finances – we want to be, and are able to be the ones to tell you yes. At our company we specialize in treating files that are seen as atypical for banks for your typical French resident; we also specialize in finding financing solutions for international clients wanting to buy and/or invest in France. The advantage of using a mortgage broker is that we have the knowledge and better access to banks than an average person would – especially foreigners. In addition,to make things easier on our clients we deal with home loan insurance and currency exchange and have a handful of real estate agents that we partner with. Everything mentioned above, we take care of. We put in the time and effort, have a bilingual office, and make information readily accessible to our clients to make the mortgage loan process as simple as possible.