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Is it possible for a non-resident buyer to finance real estate in Paris?
French banks will lend up to 85% of the assessed value of the property and renovations to most non-resident buyers. The banks here respect a very strict loan-to-income ratio for issuing mortgages, although some are more flexible in considering assets and investment income. Mortgage rates can be fixed or variable rates or a combination of the two. French banks require borrowers to obtain life insurance to guarantee the loan.
If the buyer is seeking a loan in France, the preliminary contract will include a conditional clause for financing. The clause sets out the intended loan amount, rate of interest, and length of the term. If the buyer cannot obtain a loan on terms at least as favorable as those specified, he is released from the obligation to buy the property without penalty.
Note that with higher priced properties, the seller may choose a buyer who does not have a conditional clause over one who does. So, agreeing to waive this conditional clause can be a real point of negotiation. Also note that, if you will be seeking financing only outside of France, the conditional clause will not protect you.
It is advisable to be in contact with banks or a mortgage broker at the start of your property search, so that you know what your borrowing capacity will be and will have all your documents ready once you have found the right property.
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