The over the 50s represent half of the real estate buying operations abroad, a very interesting life plan to spend retirement in the sun in countries where purchasing power can be much more interesting. Portugal, Spain, and Greece are the three preferred destinations for buyers of real estate abroad. Simply asking a bank for a home loan can be complicated for a number of reasons. The first is related to the geopolitical conditions of the country, if a nation is “blacklisted” by financial authorities, the banks will not grant a loan, out of distrust. The countries of the European Union are rarely concerned, however.
There is also the difficulty of setting up a mortgage linked to the lack of collateral. The bank can indeed put in place a guarantee on French real estate in the context of a mortgage, but it cannot do so on a property abroad. If the borrower who wishes to buy abroad already has real estate in France and wants to keep, he can use it as collateral, however, if his project is to expatriate to the foreign, other guarantees will have to be used. The Lombard loan and the mortgage in a local bank can be effective solutions.
Home loan to buy abroad: the Lombard loan and the local loan
Accessing the property of an apartment with a view of the sea, a villa in the mountains or even a loft in the sun is a dream that can be made real. You just have to find out about the local acquisition procedures, the various taxes, fees, and other charges that can be claimed, but you also have to find the right financing from French banks or foreign banks. If the mortgage loan as specified above is not possible, then we must turn to the Lombard loan.
The Lombard loan
It is a home loan whose guarantee is linked to personal savings. Rather than guaranteeing real estate, the bank offers to guarantee part or all of the savings during the entire repayment period of the loan. The bank proceeds to pledge the savings, that is to say, that it is blocked on financial investment and the latter grants between 50% and 100% of the amount saved.
A loan with a foreign bank
It is always possible to request a bank located in the country concerned by the purchase of a property, simply you must be vigilant on the progress of obtaining the mortgage. First, you must master the language or use a sworn translator because contracts and legislation are different from France, so you have to understand the issues and obligations of the borrower. Then, the loan conditions in terms of rate, duration and guarantee differ from France, the borrowing rates are not necessarily as attractive as in France. Finally, the legislation on the mortgage is completely different from France, so you have to be careful not to stay on your French knowledge and understand the laws to protect the consumer.