Financing with a residence abroad

“Residence abroad” sounds like a detail on a form. For a German bank it is the switch that decides half the enquiry — before anyone has even looked at your income.

The reason is not the risk of default. It is legal uncertainty. Three things change at once when the German residence falls away:

• The applicable law. Under the Rome I Regulation, a consumer habitually resident abroad may in certain circumstances rely on mandatory protective provisions of their country of residence. The bank then cannot be certain under which legal system its own contract would be interpreted in a dispute.
• The duty to assess. A flawed creditworthiness assessment is sharply sanctioned under section 505d of the German Civil Code (BGB) — the borrower can reduce the interest rate to market level and terminate at any time. With foreign income documents, a watertight assessment takes more effort. So it is not the default risk that rises, but the sanction risk.
• The currency. Anyone living outside the euro area additionally triggers the conversion right under section 503 BGB — an open-ended obligation for the bank.

Why a decline here means almost nothing

Because as a rule it is not an assessment of your case, but an assessment of the effort involved. A bank that does not handle these three points routinely declines across the board — regardless of how strong your creditworthiness is. Anyone who concludes from this that their project cannot be financed is drawing the wrong conclusion from the right observation.

The banks that can do it answered these questions long ago. They do not advertise the fact, because they have no audience for it — and they appear on no comparison portal. Access to them is the real value of this work.

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