Spanish mortgages tend to have major differences to the
COSTS ASSOCIATED WITH A SPANISH MORTGAGE
Basically you have 5 different costs with the biggest being Spanish mortgage deed duty which is 1.8% of the loan, Bank fees which typically be around 1% to 1.5% of the loan, Notary costs which are a maximum of 0.5% of the loan value, Valuation fee normally 0.10% of the value of the property and any fee you agree to pay a mortgage broker. All Spanish banks charge an arrangement fee for dealing with your mortgage in
LOAN TO VALUE
Standard loan to values are up to 70% for non-resident and up to 80% for residents. Spanish Mortgages and are always linked to the valuation of the property in
MORTGAGE PRODUCTS IN
Spanish mortgages are predominately linked to a variable rate and on a repayment basis. Spanish variable rate products are generally linked to the yearly euribor (European inter bank offered rate) and your interest rate will be reviewed yearly. Your interest rate for the first 12 months is determined by the euribor at the month of completion plus the fixed margin above that which your selected Spanish bank is charging. Some offshore banks can provide mortgages in sterling secured against your Spanish property purchase, linked to the Bank of England base rate. There is growing access through banks in
Releasing equity and re-mortgaging in
Spanish mortgage terms range from 5 to 40 years, are dependent on age and Spanish finance provider selected. Most Spanish banks will expect the mortgage to be repaid by age 70 but it is possible to obtain a mortgage in
SPANISH BANKS UNDERWRITTING CRITERIA
Most mortgages in
USING A MORTGAGE BROKER
Spanish Hot Properties recommends IMS, International Mortgage Solutions who we have met first hand. Unless who already have a relationship with a Spanish bank we would strongly recommend using a top quality Spanish mortgage broker. The pluses are that they know the market and know which banks are offering best rates and more importantly which bank and which mortgage product would suit your needs best. On the minus side the mortgage broker is likely to charge you a fee but in reality and most cases the mortgage broker will save you more they charge.
THE CURRENT SPANISH MORTAGE MARKET AS OF JUNE 2009
Like most banks in the world Spanish banks have cut back there lending back quite considerably and 100% mortgages are very much a thing of the past with banks for the first time lending at 70% of valuation but insisting that it does not exceed 70% of purchase price however one or two lenders may stretch this policy to 80%. Also in such market conditions it is very difficult if not impossible to remortgage for capital raising or equity release. If your property purchase is dependent on a mortgage we would strongly recommend using a reputable mortgage broker who can pre-underwrite your case before you start spending money on valuations and bank fees. Some banks who had stopped lending all together are starting to come back into Spanish mortgage market which is a good sign for the future.
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