France, Food, Scooters and More: mortgage

Showing posts with label mortgage. Show all posts

LEAVING THE UNITED STATES: THREE REASONS

We sold our house in Pennsylvania and moved to a small village in the rural south of France a little over ten years ago. We haven't regretted that decision for one moment. It's been five years since we were last in the United States and we don't anticipate returning, even for a visit, any time soon. I've been writing a blog since before we accomplished the move. Poke around in it. www.southfranceamerican.com

Here, I'm going to discuss the primary reasons that we decided to establish residence outside the United States and why we continue to believe that the decision to do so was a correct one. But I'm warning you. American politics was not one of the reasons that we left, although the politics of such topics as health and healthcare did play a role. And yes, Bush the Younger was President at the time of our decision, so one could imagine fleeing his goofy act. But no, we chose as we did for personal reasons that trump elections. (Gives you pause, all of a sudden seeing that word, doesn't it? First and last time.)

TRAVEL IN EUROPE

What did we want to do when we retired? Travel. Where did we want to travel? Europe. Why not live there? Simple as that. Really. Simple as that.

We've been to the Roman baths in Bath, England. We've seen parmigiano reggiano cheese production in Parma, Italy. For our 50th anniversary, we saw Tosca performed at the Opera Bastille in Paris. We've shopped a couple of times a year in Spain, sampled the fascinating assortment of pintxos in San Sebastian, and visited the Guggenheim in Bilbao. We traced Cathey's family back into the 15th Century in an archive in Switzerland, a seven-hour car ride away. Seven hours on a train gets me to a friend's place in Germany. And did I mention that the clean sand, clean water beaches of the Mediterranean begin less than 25 miles away from where we live? Get the picture? Retired. Traveling in Europe.

Politics? I suppose that you can say so. We admit to being Eurocentric. We've studied Romance languages in school, visited museums displaying European cultural relics and art, listened to European music that's considered classical. At our age, we'd rather dig deeper into what was in our air growing up than try to inhabit a new cultural space. We have plenty to keep us busy right here in our old neighborhood.

WEATHER

Simultaneous with the decision to concentrate our search for a retirement destination in Europe, Cathey set one of her foot-down conditions, a primary condition. "I will never shovel snow again." If it's going to be Europe, that limits the geography. As I write this, Thanksgiving is just a few days away. As I write this, friends in Cologne, Germany are reporting snow. Cologne's latitude runs through Alaska. As I write this, friends in Paris report snow. A little early, but not unexpected. After all, North Dakota shares its latitude with Paris.

Researching for moderate climates, we centered our search on the Mediterranean Coast, not because we are beach people but because the sea moderates both summer and winter weather. There's lots of pretty country in that European strip of land up against the Med, and not all of it is super expensive. We found a nice pocket in the rural southwest of France, in Occitanie. Hot summers, but manageable with judicious use of the heat pump. Temps touch freezing a night or two in winter. The fireplace place makes it cozy. No snow shoveling.

COST OF LIVING

It may seem counter intuitive to some, but a couple with average Social Security Retirement checks can live quite comfortably in our neck of France. Of course, having additional pension income or regular income from an annuity or other investments makes life more comfortable. And having the equity in hand to purchase a suitable place to live is important. As an American, you can't just walk into a French bank and get a mortgage. But if you figure out your housing at a reasonable cost, the rest comes fairly easily.

We eat foods that are in season and locally produced, not a hardship since growing seasons are long around the Med, including in nearby North Africa just a ferry ride away. And the food is grown for flavor. I don't know if we serve the best carrots that you've ever tasted, but we have had visitors who have said so. If you're an omnivore like me, in addition to veggies that taste like veggies, look for a village butcher who locally sources his meats. But beware the beef. Local beef is often grass fed and chewy, nearly game meat.

Electricity can be expensive, sufficiently so that heat pumps are ubiquitous and it's not uncommon to see private/communal solar panels/farms. Healthcare is among the best in the world and the French single-payer system is affordable and responsive. The French spend about half as much as Americans do per capita for health care, and they live longer. It's nice not feeling as though you are profit point in a health plan's spreadsheet.

When you add it all up including internet/phones (one-third of what I paid in the USofA before we left ten years ago) and taxes and water/sewer and gas/diesel and wine/spirits and restaurants and such, a pleasant and comfortable existence is easily doable with those two average Social Security checks that I mentioned.

YOUR EXPERIENCE MAY DIFFER

There are plenty of places in the world that provide even more affordable options for retirement living. If I read the current buzz correctly, Central and South America have replaced Mexico as the flavor of the month. And they probably are less expensive. But after research, expense became a secondary consideration for us. We knew that we could find a place that we could afford to buy where we wanted to live. And that's the point. We weren't running away from American politics. We were running towards a pleasant, adventurous retirement.

If you are going to live in Europe, best learn the language in the country of your choice and learn it well. While it's true that just about everyone in Europe understands some basic English, requiring them to speak your language in their country does not build community. And rural life in general is not for everyone. Not exactly a hotbed for Uber Eats. Rural folks in France are nice folks, don't get me wrong. but they are not American folks. Be prepared. Businesses close on odd days and at odd times for a variety of unexpected and unforeseen reasons. You have to learn the customs.

Renting for the long term before you buy is good advice, both in terms of France in general and your permanent landing spot in particular. We have a large house in the center of a very old town - small terrace, no garden, no garage, no pool. For each of those amenities, there's an extra few tens of thousands to pay. You have to decide what's important to you and what will be important to you ten years or more from now when the stairs are harder to climb and the garden threatens to get out of hand. All that I can do is repeat, we have not regretted our decision to move to France for one single minute.

FRENCH MORTGAGE, RAIN, AND BITS AND BOBS: #14

FRENCH MORTGAGE

Those of you who have been paying attention will know that it has been several months since I last wrote about our mortgage application. At that time, I wrote that we were at the finish line.

We were not.

Innumerable twists and turns ensued before the money finally came through. I simply could not keep up. Here are the highlights:

First met with our banker during the first week of November. By the first week of December, we were told that our request for a loan had been approved. We closed on the new house on December 15th. The loan money arrived on August 2nd of the following year.
First, the bank called it a mortgage, then a refinance, then a loan.
First, the banker proposed a 10-year term with life insurance for me. Now it's a 7-year term with life insurance for both of us.
First, I proposed that the bank finance 38% of the purchase price. The bank agreed to finance 27%.
First did an online medical questionnaire in November. The website didn't like Cathey's phone number for the verification code. Mailed a signed hard copy witnessed by the banker. Then the bank decided in April that the medical questionnaires were too old and had to be resubmitted. Still didn't like Cathey's phone number but her sister's number worked just fine. She called us with the verification code.
First the bank wanted us to open a 10,000€ savings account maintained to ensure payments. Settled for 25% less, money that we can't touch until the loan is paid off.

Each of the changes required an exchange of emails and a personal meeting with the banker. I have counted 15 separate email threads.

THE MORAL OF THE STORY: The old adage is true. The best way to obtain a loan is to prove that you don't need it. For American citizens in France, the requirements go a bit further, including making the deal worth the effort for your bank to comply with American and European banking regulations.

Regardless of the fact that we have submitted French tax returns, in addition to our American ones, for 15 years. Regardless of the fact that we have lived permanently in France for 8 years. And regardless of the fact that we have received our ten-year residency permits, one step below French citizenship, about three years ago. We are still Americans. We must learn patience with French bureaucracy. If you don't learn that patience, living in France won't be nearly as much fun.

RAIN

Did I read recently that the folks who built that ark in Kentucky (or someplace like Kentucky) are suing their insurance company? They want to be paid for water damage. To the ark that they built. From rain. Water damage.

OPERA SURPRISE

The conductor has led the BBC Philharmonic Orchestra and conducted the Royal Ballet of Covent Garden Orchestra at the Met in New York. The soloists are among the best in France. And for 30€, we'll be attending their performance of Donzinetti's The Elixir of Love in a small theater in a small town a few minutes away. We had no idea when we moved to the rural, politically conservative, ancient region of France, a region that traces human history back to Neanderthals and beyond, that modern players would find venues for music from Bach to the blues anywhere and everywhere that an audience could be called together. What a gift!

UPDATE: Attended the opera last night. Unfortunately, our heat wave hadn't broken. Fortunately, the venue's tiered seating afforded everyone a clear view of the performance. And the orchestra was tight and confident from the first notes of the overture. And the set was simple but enhanced with occasional, interesting projected animations. And the principal soloists were nationally recognized professionals. And the chorus displayed enthusiasm and discipline.

And I am so grateful to live here.

TRUMP

There has to come a point of reckoning or else why do we pretend that there is such a thing as the rule of law? You simply can't take stuff out of the Oval Office and stick it in your closet at home if it is classified certain ways or if it belongs in the National Archives. The man overtly puts the Presidential Seal on everything in sight at his resorts and on his golf courses in clear contravention of the law. His other transgressions are so numerous as to defy comprehension by reasonable, rational people. There has to come a point of reckoning.

BAD NEWS, FRENCH MORTGAGE, SAUSAGE, AND BITS AND BOBS: #13

CONTENT

The news ain’t what it used to be.

I’m retired. I have wifi. I have Reuters and Google News and Flipboard and The New York Times and more sources for ‘content’ on my phone than I could ever need. Not so long ago, scanning through those sources was enjoyable, might even have evoked a chuckle or two.

Remember the Chris Christie meme? How many ways could an obese governor lounging in a beach chair be photoshopped into wildly inappropriate current events stories? As it turned out, lots of ways, lots of very funny ways. Where are the memes featuring the politicians of today that evoke laughter and not disgust?

COVID. Trump. Boris. Putin. Ukraine. China. Climate. Supply chain. The price of energy. The price of food.

The world is too much with us...

ON THE OTHER HAND

UPI reports that a chicken walked up to a security area in the Pentagon, unaccompanied and unarmed. Yes. A chicken. Not a Bird Colonel. An actual chicken. With feathers.

When I was in college, we stole a chicken from the agricultural school, spray painted it red, and let it loose in the room of the resident assistant, where it proceeded to use the poor guy's Masters thesis on his desk for toilet paper. But the Pentagon …?

FRENCH MORTGAGE

For those who are following, we are in the home stretch. The last piece of paper that my banker needs is the payoff of our current mortgage. Our notaire, the French semi-lawyer who acts as an impartial(?) broker in all real estate transactions, is supposed to pay off Credit Immobilier de France with the proceeds of the sale of the old house. Our buyers say that they have transferred the money to escrow. Let's see what else can go wrong.

ON THE OTHER HAND

Rescuers had a hard time approaching a dog, lost in some woods. They tied a sausage to a string connected to a drone and flew it over the dog, who dutifully followed the flying sausage out of the woods to safety. Never underestimate the power of sausage.

BASKETBALL

The 76ers mortgaged their future for James Harden. If they don’t win a championship this year or next, they blew it. Yes, I know. Noam Chomsky thinks that professional sports are jingoistic exercises meant to distract the masses. My guess is that Noam never played full court, five-on-five basketball in the gym at the local Y.

GETTING A FRENCH MORTGAGE: PART DEUX #10

To recap:

You have a banker, not a bank.
Bring every piece of paper that you own.
French bankers don't negotiate like American bankers.
You don't actually apply for a mortgage until you've been approved.
You are not approved until the regional office signs off.
There's a waiting period.

And don't forget, the banker can get COVID and let your paperwork sit on his desk for a couple of extra weeks. That's where we were the last time that I posted. It gets better.

After satisfying Frederick's request for updated French tax info, I thought that we might be home free. Silly me. Out of the blue, more requests for documents. Statements for the past three months for our Belgian account. Proof that we had paid off the mortgage on our current house. And how about the deed to the new house? You know, the one that the mortgage is for. Let's take them one at a time.

BELGIAN ACCOUNT

We don't have any accounts in Belgium. Frederick said that we did, that we had received transfers of money from an account in Belgium. I asked Frederick for the dates and amounts. And thus the puzzle was solved. The dates and amounts were dates and amounts that I had used Wise (formerly Transferwise) to move money from our American checking account to our French account. Apparently, Wise has an office in Belgium that handles such transfers. I've explained to Frederick. Frederick understands. Never mind.

PROOF OF PAID OFF MORTGAGE ON OUR OLD HOUSE

We won’t pay off the mortgage on our old house until we close the sale. Mid February. Frederick knew that. The loan cannot be finalized until after the old mortgage is paid in full, he said. He could have told us that two months ago. He didn’t. Oversight? Who knows? But the fact is that Frederick never once in three months said that receipt of the loan could not be accomplished before the closing on the old house. Well, now we know. Pressure off. We’ll just have to wait.

PROOF OF OWNERSHIP OF THE NEW HOUSE

We’re still waiting for our copy of the deed to the new house. It’s been over a month since we closed and received the keys. But given that we’re waiting until mid February anyway, I don’t have jump on the notaire to send it over quickly. She said that it would take a month to finalize. It’s been a couple of weeks more than that. Gentle prodding should produce results.

AND THERE’S MORE

The home office has decided that because of our age, the loan will have to be for seven years instead of ten and the insurance will have to be at 100% instead of 50% of the loan should either of us ‘disappear’. (Apparently, that’s the polite term that bankers in France use for kicking the bucket.) Obviously, that means that the monthly payments will be higher. Not out of sight, not more than we can handle, but a significant percentage increase all the same. Shorter term. Better insurance. But this is the third time that the details have been modified.

For the first time, I let my frustration show to Frederick. Just a little...

So we’re not done yet. Once again, stay tuned.

STUFF TO KNOW ABOUT FRENCH MORTGAGES: #8

Every interaction with a French institution teaches valuable lessons. Usually, those lessons involve learning patience. The French bureaucrat/fonctionnaire has a list and loves to check the boxes. Here are a few boxes that you need to be checking.

You have a banker, not a bank. I don't know how it is for folks with abundant resources, but we are just average folks with an income close to the French national average. That means that there's one person at the bank that handles our account, our banker. Frederick. It's a small branch with just a few employees, so there's no hand off. Frederick works on our dossier and, if he's not around, the dossier sits. (More about that later.) Get to know your banker.

Bring every piece of paper that you own when meeting with your banker to discuss your request for a mortgage. If you have been living in France, five years worth of tax returns. French tax returns. (If you live in France, you have to file whether you have to pay French taxes or not.) Proof of residence, such as a utility bill that's less than three months old. Proof of income - required even though we've been running our income through the same bank for almost eight years. If joint request with spouse, proof that you are married. In other words, bring every piece of paper that you own.

French bankers don't negotiate like American bankers. We didn't need much of a mortgage. We initially asked for a mortgage that would cover about 40% of the purchase price of our new house. (Our 'new' house, by the way, is 1,000 years old.) Between the equity in our current house and our savings just for this purpose that I'd put aside, we could easily cover the rest and didn't want to borrow more than we needed to borrow. After much typing and chin scratching and more typing, Frederick told me that we couldn't have a mortgage. He carefully went over the reasons - our age, our income, the phase of the moon.

After several minutes of Frederick explaining why we couldn't have the mortgage that we wanted, and seeing how genuinely sorry he appeared to be that he couldn't help us, I asked a simple question. Suppose we only asked for 30% of the purchase price instead of 40%? More typing and chin scratching and typing. Yes! That would work. An American banker would have suggested adding money to the pot at least five minutes sooner.. I only brought it up because it seemed obvious that Frederick was not going to. Don't assume that French bankers are like American bankers. They're not.

You don't actually apply for a mortgage until you've been approved. That's right. We signed nothing until our third or fourth meeting with Frederick, after we'd supplied him with every piece of paper that we owned and completed an online medical questionnaire. After about five weeks of meetings and emails, Frederick informed us that our loan had been approved and that we needed to come in and sign the papers. We were surprised to learn that the papers that we had to sign were not our acceptance of the mortgage. We were to sign the mortgage application. Why waste time signing things if you are not going to be approved? But once the management of the branch approved, it's OK to sign the application.

You are not approved until the regional office signs off. Yippee! We're approved. Well, not really. It turns out that the approval of the branch isn't the final word. The dossier has to be sent to the regional office for the final checking of the boxes. A formality, Frederick assures us. Fingers crossed because, although Frederick says that we are approved, we are not really out of the woods quite yet.

There's a waiting period. French law takes cooling off periods seriously. What is a cooling off period? When buying a property, the buyer has a ten-day window after signing the purchase agreement to back out of the deal without major penalty. In the case of a loan, you cannot except the money until the eleventh day after approval - in our case, until Montpellier approves. We didn't know that until after we signed, not that it would have made any difference. But it would have been good to know. Maybe it was in the fine print. Be that as it may, whatever the schedule that you had in mind, add the cooling off period.

Frederick got COVID! I mentioned that Frederick didn't have a buddy at the bank to keep up with his customers when Frederick was sick or went on vacation. As it turned out, the day after we provided the last document that the bank required, Frederick tested positive. (He's fine, now. Thanks for asking.) Frederick was out of the office for three weeks. While we thought that our dossier was in the mail to Montpellier, in truth it was languishing on Frederick's desk. We are now waiting for the next update from Frederick, who is back at work after his bout with COVID.

It's been about ten weeks now. There's more. Stay tuned.

SELLING OUR HOUSE IN FRANCE: TRUE STORY #1

Transacting business in France is always an interesting undertaking.

Don't get me wrong. I am not one of those sourpusses who has moved to France and complains that French people live there. But French people do have ways of doing things that do not often correspond to the way that I am accustomed to doing business. We are selling our home of seven years in order to finance the move to a house more suitable to our age and old bones. (Links and pics below.) We'll have fewer, more gentle stairs to climb. More room to display, store, repair, and otherwise deal with the stuff we've accumulated over those years. We're talking about multiple opportunities for cross-cultural misunderstanding. Take the case of applying to our French bank for a mortgage.

I won't go into numbers. But I walked into the meeting with the young, casually dressed banker hoping to borrow about 40% of the cost of buying the new house. (It's strange calling a house built over 1,000 years ago a 'new' house.) I documented our income through a combination of French and American tax returns. We went over the payoff of our current mortgage (with a different bank) and the net from the sale. I told him how much of our savings I was willing to contribute to the deal. And I asked that the bank finance the rest, that 40%.

A lot of typing ensued. Understand, we were both wearing masks and Frederick was seated behind one of those clear plastic shields that they fit around office desks these days. (Future archeologists will struggle to determine the function of thousands of oddly shaped examples of wasted hydrocarbon.) I could see that Frederick was seriously crunching numbers to make things work. He finally looked up, said that he couldn't loan me the money, and scooted his chair around to my side of the desk to pinpoint on paper exactly why he could not. Long story short, basing our lending ceiling on our age and the income on our tax returns, primarily showing only Social Security income thanks to the surprisingly reasonable cost of living in France, I was asking to borrow too much.

He was a nice, earnest young man. I listened closely. I waited. Perhaps you can guess what I was waiting for. I waited for five minutes and I would have waited forever. So I asked the question.

"Suppose I put some more money into the deal. Could I borrow 30% instead of 40%?"

More typing. Smiles. Yes, that would do it.

I'm from the USofA. When two people want to do a deal and one can't quite get it done, negotiations begin. Avenues are explored. The French, not so much. They don't seem to want to make the first move. Anyway, that's done. Now I have to sell our house. I'll keep you apprised of the process. Meanwhile, here are some pics. If you know anyone looking for a lockup-and-leave in the rural south of France, send them my way. Have them bring about $150,000. I just might accept a bit less.

https://www.leboncoin.fr/ventes_immobilieres/2042201070.htm

BACK FROM VACATION

Howdy Folks!

I'm back from my sojourn in Mexico and Texas, I'm organizing my thoughts and I'm writing away. You'll hear about the Mexican silver-mining town of Guanajuato; about barbecue in Lockhart, Texas; about visiting a west Texas ranch; about my nephew's wedding party; and about anything else that strikes my fancy.

Stay tuned.