Johhnyboy

Can't see any info in the FREE BEER thread so maybe anyone out there can advise me.

I am buying off-plan and am looking at the options of getting a mortgage for the property (about 75% max). Anyone done that recently and can share experiences etc.
Is it much more beneficial to get a mortgage in UK or Spain?
What are the cost/charges for getting one in Spain

I am non-resident, have a NIE and it is for a holiday home...

Cheers,
John

CBANDY

"What are the cost/charges for getting one in Spain"


Bloody expensive.

1% set up charge
1% tax
Notary fees
hacienda fees
Lawers fees.

I changed my mortgage from 1 bank to another 18 months ago and it cost me around 5,000 euros. Just to change banks.

Bri and Katee

Halifax in Spain seem to have a good deal at the moment.

Having said that we arranged ours through the Leeds, just to be awkward the branch was in Gibraltar but they offered a mortgage based on the Euribor so it was actually cheaper than an English mortgage.

To make things more complicated though, we have to pay the mortgage in Euro's. So we have the problem of changing sterling to euro but paying it into the Leeds B.S head office which is not 60 miles from where we live in the UK!

The stupidity of it all is they will change it back to sterling

Rixxy

Will also depend on the bank valuation and your purcahse contract price as things have changed - well are more enforced now. There are some good products out there and you can get up to 90% but the openeing costs are higher.

It can be adviseable to use a good independant broker - the one I use would have advised clients correclty in accordance with their circumstances to ensure no need to remortgage as it is very costly. He also can ensure clients do not have to take out the banks life insurance, which in some cases would not be good advice with regards to inheritance tax!

Send me a pm if you want my guys contact details and you can speak to him direct - he doesnt charge for the call or advice!

Joe King

Not mortgage advice, but advice to carefully consider buying off-plan given the current glut of unsold new builds in Spain at the moment.

If you are definitely buying remember a Spanish mortgage will be in Euros - if you are paid in pounds the cost of your monthly payments will be affected by the exchange rate. If the Euro strengthens against the pound you will pay more.

kevinbeddow

one thought would be to work out what your yearly repayment would be and then convert it once a year,if this is possible of course?

mikelincs

Given the current drop in house selling prices, then the bank valuations can be upto 120% of the value, and people are getting mortgages for that figure. Mortgages go up to 80 years old here, so you can get decent ones even at retirement ages from the UK. Fees are generally reckoned to be about 10% of the cost, and these will cover all taxes, lawyers, notaries, getting the water and electricity changed.

teddy14

im hoping to buy in spain in the new year, i wondered do the banks lend to 3.5x salary like they generally do in the UK, or is it based on what you can actually afford to pay.?

Rixxy

You cant get loan to value any more without producing a fraudulent purchase contract. Percentage lending is now based on issue or a purchase contract which states the price. Most pruducts therefore are either 90 or lower percent of the valuation subject to a maximum of 100% of the ppc.

Valuations are also coming down as valuers have been instructed by the bank of spain to revise them and we are seeing drops of around 15-20% from only 6 months ago!

Banks will look at your criteria independantly and are around 33% debt to income ratio. Other factors are other loans, credit cards etc etc etc. It is complicated and a good broker can steer you to the right product as it is astronomical to remortgage in Spain, so you are advised to get it right the first time around!

mikelincs

I was asked for the last three months wages slips.

Rixxy

Some ask for wage slips, others bank statements, otheres a bank reference, experian report, credit card statements, mortgage payment slips, but usually a selection of the above. It very much depends on how much you are borrowing, what aother liabilities you have - and some dont need to be highlighted! and the lender

so each case is individual - a decent broker can guide you though all of this and no I am not one!

Johhnyboy

Thanks for all the advice, as to buying I am committed as I agreed 18 months ago and it will be ready in 3-4 months time. One other thing, a bank in Spain
has contacted me and wondered if I would like details about taking over a mortgage that the developer has on the property. No harm in getting the details but anyone done this before and any pitfalls?
Thanks
John

Joe King

"A word of warning on 'bundled mortgages'. These are mortgages offered with properties sold off-plan by developers. Buyers are given the option of taking over the developer’s mortgage (an option known in Spanish as ‘subrogar’), potentially saving money on mortgage set-up costs. This may be a good solution, but buyers should also be aware that this is sometimes a way of selling expensive and inflexible mortgages to unwitting buyers. Buyers are not obliged to accept a bundled mortgage when buying off-plan on a new development, and are advised to at least check if there is a better mortgage available. Note that developers in Spain often save mortgage cancellation costs when buyers take over their mortgages, which is why they often put pressure on buyers to do so. It is illegal for developers to pass on mortgage cancellation costs to buyers, though that doesn’t stop many of them from trying to do so."

http://www.spanishpropertyinsight.co...mortgage_4.htm

Your lawyer will be able to advise you on the above.

Rixxy

I second that totally - the terms are not usually favourable to the buyer but you never know!

twyntub

There is also the other catch-22 that if you were buying with a "normal" mortgage arrangement, then no money will be handed over until the paperwork is complete and the property is fully legal (e.g. habitation licence, etc). This is because it's an unwanted risk for the bank (they'll struggle to sell on a house which cannot be legally occupied if the buyer defaults), and as an offshoot it therefore offers buyers some protection.

This is NOT necessarily true when taking over the developer's mortgage. Think of it this way - the bank already has money tied up in the development, at a point way before habitation licences are granted. Giving mortgages to buyers even before the licences are granted will actually reduce the bank's risk profile. A number of people on the SPI forum seem to have been caught out over this particular trick.