1: Have a bank-friendly profile
Banks are always interested in borrowers who know how to manage their wealth. They enjoy people who tick all the boxes for a straightforward application. So, what are these ‘’boxes’’?
- A low debt-to-income ratio. Banks generally tolerate a ratio of up to 33%
- A good professional situation, permanent position and preferably employed
- The last three statements for every account, showing no incidents of missed payments, overdrafts, etc…
- Highest personal contribution possible (see below)
2: A mortgage application without savings is not in your favour
For French residents, banks usually ask for 10% as a deposit but some may offer up to 100% LTV.
For non-residents, lenders will ask for at least 15-20% of the property price as a deposit. However, if you want to access the best rates, it is better to increase your deposit to 30%.
Some private banks offer mortgages with 0% deposit and 30% minimum collateral (AUM). The minimum purchase price is set at €1m.
Do keep in mind that banks are traders: they offer you a good mortgage rate in order to secure some of your assets in exchange (possibly invested in the bank’s own investment portfolios). The more a client engages in a relationship with the bank, the better the rate offered tends to be.
3: Show your ability to save money
Lenders will look at your previous bank statements, they will study closely your ability to put some money aside. Being able to demonstrate your ability to save money shows the bank that the debt is not at risk or, at least, it is a low-level risk.
4: Use the competition
They are a number of different lenders in France, and plenty of different rates and advantages. Why should you stick with only one bank? Negotiating with a bank with an offer from another is always a strength. But the margin of negotiation is still narrow.
5: Use a mortgage broker
This process can be time-consuming. Plus, non-resident borrowers will have to reach particular departments within the banks themselves. In real estate markets such as Paris or South of France, time is a very valuable resource. In such markets, a prime property can be sold within days! Contacting a mortgage broker during this situation is always preferable. French Private Finance is here to help you avoid missing out on a sale!