End Your Spanish Mortgage Worries
Many ex pats living in Spain and especially those from the UK are finding it difficult to meet their Spanish mortgage payments. £ versus € exchange rate fluctuations have eroded the real value of UK earnings and pensions and the rising cost of living has meant that the budget doesn’t stretch as far now as it did just a little while ago. Everyone’s personal circumstances are different so there can be no one size fits all solution that will enable you to enjoy more of what life has to offer here in the Spanish sunshine.
Maybe you are contemplating a property purchase here and just want to know the best way to go about raising finance. In any event our CeMap qualified advisers are waiting to give you a FREE unbiased and discrete consultation to select the solution that is right for you. Our Lifetime Mortgages and Equity Release plans offer a NO NEGATIVE EQUITY GUARANTEE and it costs nothing to find out if our services can make a real difference to your lives without the continuing worry of lack of funds or high mortgage repayments.. You worked hard to buy your home so why not let your home work for you?
Our advice is FREE and there is no obligation for you to act on any advice that we give, it is entirely up to you. Send us a mail or call us and we will call you at a time convenient for you and talk through the options.
SPANISH MORTGAGES – GENERAL INFORMATION AND GUIDE
If you would like to know whether or not it would be possible borrow the amount you are looking for, please contact me with your preliminary enquiry and I will either reply to your email or contact you via telephone if I require further information in order to be of assistance.
Standard information
Interest rates generally on offer range from Fixed and Variable linked to the Euribor from 5% subject to status and the percentage of the mortgage borrowing. Repayments are due in Euros and so will fluctuate with the exchange rate of any foreign currency. Once the funds have been released and the rate set, this rate then applies to the account for a given period depending on the mortgage product. This can bimonthly, quarterly, half yearly or yearly variable. After the given period, the interest rate is then reset depending on the current Euribor rate at that time.
Mortgages are available up to 80% for Non Residents and 100% for Residents of Spain subject to the mortgage valuation but this is often restricted to a maximum of the Purchase Contract or even the price being declared in the Escritura. Spanish banks can only lend on the basis of a mortgage valuation. Mortgage valuations are carried out as prescribed by law in Spain, and are NOT a market valuation. Spanish law requires that valuations be set by reference to the recorded transaction values of at least 6 similar properties, which have been sold in the area in the preceding 6 months. The valuer derives an average price per square metre from these comparison properties, and this is then multiplied up by the size of the property to arrive at the mortgage valuation. This valuation therefore excludes VAT, Property Transfer Tax, Stamp Duty and all the other costs of buying the property.
Where a property is bought “off-plan”, we can lend on the mortgage valuation, which will be done at the end when the property is ready. If prices continue to rise, this may be 100% or more of the agreed price. In this case we can lend 100% of the agreed price, but no more. This is because if the mortgage is more than the declared value, the tax authorities will suspect that the property has been under-declared, and the transaction could be investigated and the buyer could be penalized. A similar situation can also arise where part of the price is paid in cash and the full amount is not declared on the Escritura – we can get 80% of the valuation, but this is often restricted by the amount being declared.
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