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| Vanessa Foster of CA | Your dream property still possible nowadays? | B4U Manager B. Haas |
Dear Burgundy4u friends,
In the past you have registered with burgundy4u and have indicated interest in buying a property in Burgundy.
We share with you here an interview with Vanessa Foster from Credit Agricole, on the state of the French banking sector versus other countries.
In this financial crisis, it gives us ideas to profit from it, rather than get scared and remain inactive.
Burgundy4u has suffered like all estate agents, but luckily we have prepared in advance and are ready to weather this storm.
Our aim is to be here in the long term to serve our clients with the high quality standards we are accustomed to.
Luckily France has not experienced a price boom as Spain, Ireland or the United Kingdom, so we will not experience the same down turn or crash in prices.
We discuss on a regular basis with our vendors their property, and adapt the asking prices to the new tendency in the market.
Thus making it possible to get some good deals.
We also share with you here some tips on how to best use our website. Do not hesitate to contact me or any of my colleagues at www.burgundy4u.com
We share with you here an interview with Vanessa Foster from Credit Agricole, on the state of the French banking sector versus other countries.
In this financial crisis, it gives us ideas to profit from it, rather than get scared and remain inactive.
Burgundy4u has suffered like all estate agents, but luckily we have prepared in advance and are ready to weather this storm.
Our aim is to be here in the long term to serve our clients with the high quality standards we are accustomed to.
Luckily France has not experienced a price boom as Spain, Ireland or the United Kingdom, so we will not experience the same down turn or crash in prices.
We discuss on a regular basis with our vendors their property, and adapt the asking prices to the new tendency in the market.
Thus making it possible to get some good deals.
We also share with you here some tips on how to best use our website. Do not hesitate to contact me or any of my colleagues at www.burgundy4u.com
Interview 4U, Meursault October 2008
Benjamin Haas of Burgundy4U interviews Vanessa Foster, international financial advisor of Credit Agricole Champagne Bourgogne:
Has your bank begun to decline more mortgage applications from non-resident second homebuyers?
No, on the contrary in my experience, people who choose to buy a second home in a foreign country are naturally cautious in terms of the amount they wish to borrow.
As a result, I have accepted all of the loan applications that have been submitted in recent months.
Why are UK and Dutch interest rates higher than rates offered by French banks when financing a second home in France?
Each and every bank operates in a different way so it is difficult to generalize.
But when a UK or Dutch bank offers a mortgage loan for a property abroad, if they do not use the usual mortgage guarantee mechanisms and this type of credit is more risky for them.
Also, many UK and Dutch banks have to borrow from other financial institutions, which in turn increases the interest rate offered. French banks such as Credit Agricole have a positive working capital ratio and do not need to borrow funds to finance mortgage loans.
Finally, I would say the French banking system works on a more pay as you go system. That it to say that lending is not a particularly profitable activity for French banks.
The system can be seen to be quite democratic: each client simply pays for the services he or she requires rather than borrowers paying more to cover overheads for all clients.
To add to this, Credit Agricole is split up into regional cooperative banks which each aim to offer their members some of the most competitive fixed-rate loans in France.
How do you see interest rates developing in the future?
Whilst the European Central Bank has recently dropped interest rates, it is impossible to say with total certainty that this trend will continue in the short-term or medium-term.
Fixed-rate loans have always been more popular than variable rate loans in France as they allow people to budget both now and in the future.
Having said this, if rates continue to drop as they are doing currently, it may be worth considering a variable rate mortgage in order to benefit from a potential drop in rates, just as long as the rate is capped, for anyone wishing to limit the potential risk.
How is the French banking system different in France to the US for example?
French banks are very conservative and face tight banking regulations when it comes to approving a loan.
As a result the credit system is much more stable.
Credit is not awarded on speculation but on the actual financial situation of our clients, with close attention paid to a clients solvency and the affordability of the loan.
The best illustration of this is that equity release loans were only legalized in France at the end of 2007 and to my knowledge have not been commercialized.
Given the sub-prime mortgage crisis in the US, I think it is unlikely that any French bank would launch this type of mortgage.
What makes Credit Agricole different from Northern Rock for example?
Northern Rock specialized in mortgages and it is always risky for a company to be limited to one main activity.
Credit Agricole approach has been completely opposite to this, in that the group has chosen to diversify its activity.
More than a third of the French population has an account at Credit Agricole and half of French companies bank with us. Internationally, we are based in over 70 countries.
Has your bank begun to decline more mortgage applications from non-resident second homebuyers?
No, on the contrary in my experience, people who choose to buy a second home in a foreign country are naturally cautious in terms of the amount they wish to borrow.
As a result, I have accepted all of the loan applications that have been submitted in recent months.
Why are UK and Dutch interest rates higher than rates offered by French banks when financing a second home in France?
Each and every bank operates in a different way so it is difficult to generalize.
But when a UK or Dutch bank offers a mortgage loan for a property abroad, if they do not use the usual mortgage guarantee mechanisms and this type of credit is more risky for them.
Also, many UK and Dutch banks have to borrow from other financial institutions, which in turn increases the interest rate offered. French banks such as Credit Agricole have a positive working capital ratio and do not need to borrow funds to finance mortgage loans.
Finally, I would say the French banking system works on a more pay as you go system. That it to say that lending is not a particularly profitable activity for French banks.
The system can be seen to be quite democratic: each client simply pays for the services he or she requires rather than borrowers paying more to cover overheads for all clients.
To add to this, Credit Agricole is split up into regional cooperative banks which each aim to offer their members some of the most competitive fixed-rate loans in France.
How do you see interest rates developing in the future?
Whilst the European Central Bank has recently dropped interest rates, it is impossible to say with total certainty that this trend will continue in the short-term or medium-term.
Fixed-rate loans have always been more popular than variable rate loans in France as they allow people to budget both now and in the future.
Having said this, if rates continue to drop as they are doing currently, it may be worth considering a variable rate mortgage in order to benefit from a potential drop in rates, just as long as the rate is capped, for anyone wishing to limit the potential risk.
How is the French banking system different in France to the US for example?
French banks are very conservative and face tight banking regulations when it comes to approving a loan.
As a result the credit system is much more stable.
Credit is not awarded on speculation but on the actual financial situation of our clients, with close attention paid to a clients solvency and the affordability of the loan.
The best illustration of this is that equity release loans were only legalized in France at the end of 2007 and to my knowledge have not been commercialized.
Given the sub-prime mortgage crisis in the US, I think it is unlikely that any French bank would launch this type of mortgage.
What makes Credit Agricole different from Northern Rock for example?
Northern Rock specialized in mortgages and it is always risky for a company to be limited to one main activity.
Credit Agricole approach has been completely opposite to this, in that the group has chosen to diversify its activity.
More than a third of the French population has an account at Credit Agricole and half of French companies bank with us. Internationally, we are based in over 70 countries.
To contact Vanessa: vanessa.foster@ca-cb.fr
ips on using Burgundy4u.com:
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Useful when you are exploring a house and want to know about the area it is located in. You can also discover the total property offer per area.
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Click on “property that fit my (search) profile” to see interactive houses that fit your brief given to burgundy4u.
Discover the result of your search criteria out of nearly 700 objects and contact directly the responsible manager of our 8 local agencies all over Burgundy.
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