| Are Americans aware of the parlous state of the Euro? |
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| No |
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| The what? |
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pogle
New Poster
Cash: $ 0.45
Posts: 2
Joined: 27 Nov 2011
Location: Bordeaux
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| Euro question |
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Hi everyone
This is a very specific question relating to the imminent disorderly breakup of the Euro. I know most readers are American, but I'd say the financial principles involved are universal. As I'm new here, perhaps someone could direct me to the best place to ask...
So here is my question
I live in France, self employed and most of my customers are French - I have French bank accounts, so everything in Euros. I have about 60 k€ left owing to a French bank on my fixed rate mortgage. I've already put all my savings into GBP. When the Euro dies, as now seems inevitable, what risk do I run on the mortgage? What will this debt mean when the Euro crashes - particularly what will the bank demand of me? What should I do? Sell my house now? Sell it after the crash? Keep hold of it? Will I find it harder or easier to pay the mortgage after the crash (lets assume I don't lose all my customers).
I'm hunting around the finance blogs and forums for advice - I'd really appreciate yours 
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Sun Nov 27, 2011 12:28 pm |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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quote:
particularly what will the bank demand of me? What should I do? Sell my house now? Sell it after the crash? Keep hold of it?
Remember, you are in the driver's seat - the lender is in a positon of having to collect from you. Ie, the lender can "demand" all they want to, but they have to get your agreement to change your original agreement. And in most scenerios, the currency will devalue somewhat - so if you owe 100,000 now that will stay fixed (in whatever conversion) and your income may inflate by a large ampount over 20 or 30 yrs - so you will be paying back the 100,000 with cheap money.
BTW, why did you choose GBP? As opposed to USD, Canadian dollar, Australian dollar? (My choice would probably be Canadian).
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Sun Nov 27, 2011 4:39 pm |
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pogle
New Poster
Cash: $ 0.45
Posts: 2
Joined: 27 Nov 2011
Location: Bordeaux
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Hi thanks very much for that!
I imagine that if the euro falls apart and countries go back to their national currencies, the Franc will be one of those which devalue rapidly, reducing the net value of the outstanding Mortgage. Now, as I will still be integrated into the French economy in terms of income and expenditure I won't see much change apart from the difficulties of a grim economic climate.
My real worry is the bank, having seen the value of its credit to me drop so dramatically, will take drastic measures to recover what they can - perhaps including repossession. Is it possible, for example that they could insist on my monthly repayments respect their pre-devaluation real value?
I bought GBP simply because I am British and I still have a UK bank account - I transferred all my Euro savings there.
Its great to be able to talk about this - thanks again
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Sun Nov 27, 2011 4:54 pm |
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