Large French Mortgage for HNW American Client
20th July 2022
Key Figures:
- Client: US National & Resident
- Property type: Holiday Home
- Property Value: €7,000,000
- Loan Amount: €3,500,000
- AUM: 20%
- LTV: 50%
- Variable Rate: 2.1%, 15 years repayment
The French Riviera is one of the most popular regions for American residents to buy property. Americans tend to be drawn to France’s beautiful coastline, which provides ideal real estate for holiday homes and second homes. The stretch of coastline between Ramatuelle and Roquebrune is home to some of France’s most desirable properties.
Here at Enness, we can help residents of the United States interested in purchasing French real estate, by securing significant property finance via a panel of international lenders. We were recently approached by a US national and resident who was seeking a French mortgage for a €7 million holiday home purchase in Cannes.
Logic would dictate that using a French bank for a French property purchase would make sense, and sometimes it can. However, many French retail banks cater mainly to lower-value property, and straightforward purchases. If you intend to buy ultra-prime French property, private banks can usually offer the most competitive mortgages.
Compared with France’s retail banks, who have a rigid underwriting process, private banks will often take a more holistic view of your wealth. The way that private banks will assess your situation and the affordability of the mortgage is usually beneficial if you have significant assets in various countries, multi-currency income, if you have a high net-worth but little liquidity or if you have an unusual background or situation. It is worth noting that most private banks will require that you put assets under management in return for a high-value mortgage.
How much you will need to put forward will depend on the property you are looking to buy, what it costs and how liquid you are. As this case illustrates, assets under management totalling between 20% to 50% of the property value is standard and can offer far more advantages, from more competitive rates, to increased flexibility and occasionally the ability to borrow more.
If you are considering buying French property and want to learn more about how Enness can help you, get in touch. The team will be delighted to talk you through your options as an American buyer and answer any questions you have.
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