For non-residents who wish to purchase a property in France, it is still possible to obtain a 100% French mortgage. The criteria for the 100% products that the French banks employ has always been strict and this is something that is unlikely to change in the near future.
The 100% products available are mainly aimed at applicants who have significant savings and cash available. This usually requires cash to the equivalent of around 30% of the purchase price which could be invested in an investment portfolio. If the currency you were sending was weak compared to the Euro, you would not have to convert the funds straight away, which will reduce the currency fluctuation. You can convert the funds when the currency is stronger for you.
For example, we helped a client who was a British national who wanted to buy a luxury apartment in Paris:
Purchase Price: €2,000,000
Loan Amount: 100% financing with 30% side investment.
Type: Capital Repayment
Investment: Multi-currency GBP portfolio with a prudent investment strategy (5% Yield).
Date: 01 July 2011
Rate: €/£ =1.11
Date: Mid May 2012
Rate: €/£ =1.25
Amount on 01 July 2011: €600,000
Equivalent in GBP on 01 July 2011 = £540,000
Equivalent in Euro on mid May 2012: €675,000
Gain on the currency: €75,000
Gain on the Portfolio: £540,000 x 5% = £27,000
Portfolio mid May 2012: £567,000 * 1.25 = €708,750
Global gain in 10 months: €108,750
As you can see, you make gains in two ways: (1) on the currency and (2) on the portfolio. (And you receive a 100% French mortgage).
The benefits and advantages for using this product are:
1) You can leverage on foreign currency
2) Currency flexibility throughout the entire life of the mortgage.
3) Safety: Portfolio managed by a dedicated, experienced asset manager, and invested between 80 and 100% fixed income products.
4) Asset diversification.
5) You can also redeem the mortgage at any time with a variable mortgage, by adding just .10% to the rate. (Currently 2.40%).
Ultimately, it is probably best to discuss your options and see whether you fit the lenders criteria with an experienced French mortgage consultant. To find out whether you are eligible to a 100% French Mortgage product or if you would like to look at the other products on the market please contact a mortgage consultant on 0044 (0)20 7428 4919 or submit your details here www.sextantmortgages.com/get-a-mortgage-quote.