Spanish Bargain Properties

MORTGAGE DOCUMENTS

Mar 162009

Standard Documentation Required

* ID needed
* N.I.E. (Foreign Resident’s Number)
* Passport / Residence permit / Spanish Identity Card of applicants
* Proof of Residency
* Proof of Income
* If you are Employed then we will need the following
* 3 months pay slips
* P60 or equivalent Tax Paid Receipts
* Other income (Pension letters, State Benefits, Rental Contracts, Investments)
* 3 to 6 months bank statements for ALL accounts in UK and Spain
* If you are Self Employed
* Criteria changes regularly so please contact us for the current requirements
* The Property
* Purchase contract
* Escritura (property deeds)
* Nota Simple
* Protection Policies
* Copy of existing Life Assurance policy
* Copy of existing Buildings & Contents Insurance policy

Spanish Mortgages Solutions. Please feel free to contact us with any question and without obligation.

CAMBIO DE CASA

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Mar 162009

What is a CAMBIO DE CASA mortgage?

This is the type of mortgage you need when you have seen a property you want to buy but you are having difficulty trying to sell your current Spanish property.

You are worried that you will lose the second property to another buyer if you cannot act soon but there is an answer!!

It is called a Cambio De Casa!

This is where the bank will grant you a mortgage to purchase the second property and they will then take both properties as security. The mortgage will be on an Interest Only basis for up to 3 years which will reduce your monthly outgoings and also gives you up to 3 years to sell the first property. You can then either reduce or eliminate the mortgage loan completely when you first property is sold.

If this is a situation you find yourself in, then as you can see there is a SOLUTION.

Email us at info@fincalinkup.com for further information

Spanish Mortgages Solutions

LIFETIME MORTGAGES

LIFETIME MORTGAGES 1 Response »

Mar 162009

WHAT ARE THEY ALL ABOUT?

It is a well known fact that people are now living longer than ever. We have a much healthier diet, we exercise more and take a much keener interest in life than say our grandparents did. We want to enjoy our lives, even when we are in our eighties and nineties and why not?

WHAT A LIFETIME MORTGAGE COULD DO FOR YOU!

A lifetime mortgage will give you the opportunity to release some of the equity from your Spanish home for you to do with as you wish. This could give you the resources needed to enhance your lifestyle and do some of the things you have been dreaming of. Maybe that world cruise you have always promised yourselves or maybe a brand new car. I am sure your list is endless with all the things you would love to do if you had the money. Well, now you can by letting your property pay you back for all the years of hard work you have put in, creating it. The Lifetime Mortgage is not tied to any investment product.

HOW THE LIFETIME MORTGAGE WORKS

The Lifetime mortgage allows you to release equity some of the equity from your Spanish home, enabling you to borrow money as a single cash lump sum. You are able to use this money for any purpose and it does not have to be repaid during the life of the mortgage. You will make NO monthly repayments. Instead, the interest compounds and is added to your mortgage each month.

The mortgage is secured on against your Spanish property and the amount you owe and the interest due is only repaid from the sale of your property when you pass away, or permanently move out of your home. A practical way of unlocking some of the value that has built up in your home without having to move. You are not selling or giving away a share of your home, and therefore you will retain full ownership of it, and as the owner you can continue living in it for as long as you wish.

If you are borrowing with your spouse or partner, the mortgage will only need to be repaid following the last surviving partner dying or selling the property. The excess of the sales proceeds over the amount required to repay the Lifetime mortgage belongs to you.

The Lifetime mortgage is available to UK, Irish and European Union nationals, if they speak and understand English and who own their own home in mainland Spain and the Canary Islands or the Balearic Islands. If you currently have an outstanding mortgage, this will need to be repaid either before or at the same time that your new Lifetime Mortgage begins.

The minimum age at entry is now 65 years for each applicant. (w/c 19th Jan 2009)

You will remain the owner of the property so you are within your rights to sell it or move to another property at any time.

NO NEGATIVE EQUITY GUARANTEE

In the event of your home being sold for less than the value of your mortgage and the interest owed, you or your beneficiaries will not be required to make up the shortfall. This guarantee provides prospective clients and their future beneficiaries with complete peace of mind.

Spanish Mortgages Solutions. Please feel free to contact us with any question without obligation.

EQUITY RELEASE

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Mar 162009

ASSET RICH & CASH POOR?

Did you know that you can:

* Release equity from your property – No mortgage repayments EVER.
* With a guarantee against negative equity – Cash-out to do with as you wish.
* No proof of income is required – No minimum or maximum age limits.
* Interest only mortgages – Competitive rates guaranteed.

These are just some of the benefits we can offer our advice that is tailored to your personal needs.

A Guide To Releasing Equity From Your HOME

Note: It is now required that you be 65 years of age or older to qualify for one of these equity release schemes.

There are several ways to do this and I have listed below captions for each method. If this is something you are considering it is recommended that you consult with a qualified adviser to discuss your particular circumstances:

Normal Mortgage – Most of you will know what this is and how it works but to recap, you and your property are assessed by a lender on the security of their investment and they either lend or they don’t. Age, income, property are all big factors in this and of course you have to make payments every month reducing your monthly budget accordingly.

Investment Backed Mortgage – Similar to a normal mortgage but instead of taking out a smaller percentage of the money tied up in the property, more is released and an investment is secured which should pay the mortgage and may even provide an additional income source on top. There are various schemes out there some promising and the world but personally I would only look at the safest options. If there is any extra money left over, great but we do not recommend this product type.

Reversion Scheme – Personally I don’t like these. You basically sell your house to the lender and they accumulate all the future equity in the house, it is very limiting on what you as a tenant can and cannot do. Thankfully I am not aware of any reversion schemes currently available in Spain.

Lifetime Mortgage – A good lifetime mortgage provider will offer a “No Negative Equity Guarantee” meaning you can never owe more than your property is worth. Rates should be competitive and get out clauses minimal. These schemes are usually only available to the over 65′s and provide a lump of money to do with as you wish. They are a lot easier to set up as it is the property that is under assessment and not income etc. The interest is added to the loan and you don’t have to make monthly payments. A good scheme ensures that the house remains yours and you are free to sell it at any time should you decide to.

Spanish Mortgages Solutions – Please feel free to contact us with any question without obligation.

MORTGAGE GUIDE Part 2

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Mar 162009

Guide To Buying Country Properties

If you are looking to purchase a resale property and it happens to be a rural one (sometimes known as ‘Rustico’), then the mortgage valuations can sometimes prove difficult for a number of reasons and they are:

Sellers often insist that the price of their property is under-declared on the Escritura (Deed) and that part of the price is paid unofficially to avoid tax. The mortgage is often restricted by this reduction.

Mortgage valuations are based on comparison values taken from the Property Register, so will only reflect declared values. On average these are 20% below the full market price.

Mortgage valuations are essentially only “bricks & mortar” valuations – the value of any very large plots of land is not included.

Mortgage valuations are only based on the size of the property recorded in the property Register – very often owners have not registered the full size to avoid tax.

We can only obtain mortgages on properties that are registered for residential occupation. Again to avoid tax, rural properties were not always registered in this way.

To check the registration status, we need to see a “nota simple” this is an extract from the Property Registry which gives us the necessary information needed. This really needs to be considered as a priority before you make any commitment to buy the property and in particular, if it’s a rural or inland village property. You may find that the maximum mortgage obtainable will be around 60% loan to value.

Our status guideline is that you’re total mortgage and loan repayments, rent, and other commitments (including the new mortgage in Spain), should not exceed 45% of your net disposable income (That is the maximum; the norm is 30 – 35%.

There is no equivalent in Spain of “buy-to-let” mortgages in the UK. We cannot take potential future rental income into account. We may be able to take some of the rental income into account if the property has already been rented and there is proof of the income received and tax paid on it, or – if new – if the developers are renting other properties on the development and they can give us details of the rents being generated.

We then add this to your UK income and then apply the 45% affordability ratio. This will normally work out as being a “top-up” of between 10% and 20% of the price, and in any event your UK income always has to be the main source of income.

We can obtain a maximum term of 40 years up to age 80 on normal or ‘status’ applications where income is available to show the lender. A mortgage for a purchase or even a re-mortgage (to release capital) from your property is now a fairly common theme in Spain. The maximum Loan to Value is 60%.

The fees our lenders charge for obtaining the mortgage are a valuation fee of around 0.15% of the property value and an application fee of 1 to 2%. In addition, there are other taxes and costs which you have to pay for registering the mortgage: stamp duty of around 2% is charged on a mortgage deed; and notary and registration fees of around 1% of the mortgage amount. These taxes and fees are in addition to the costs involved in buying the property.

A mortgage in Spain is a Notarial act and so cannot be changed. It is advisable to give the amount you want to borrow a great deal of thought as you will incur costs if you need to ask your mortgage Lender for additional funds or to change anything further down the line, and this includes extending the mortgage term. However, you can normally overpay your account by up to 10% per year in order to repay it sooner than the official term stated without a penalty.

When and if you decide to sell your property and the new buyer wants to take over your mortgage, then an early redemption fee will not be charged.
You may also be able to negotiate with your lender to waive the fee if you take out a new mortgage with them.

If your Spanish property is your main home, then you will need to prove that you have a guaranteed income, which may also be a pension or investment income. If you will be working in Spain, then you will need to supply your new contract and up to 6 months’ pay slips. If you are planning to set up a business or buying an existing one, then you will need to supply satisfactory accounts before a mortgage Lender could grant a mortgage.

If you are buying an off plan property then the property will have to have been completed and registered before the Lender will grant the mortgage because until then the property does not exist. The contract you sign with the builder at the start is not a purchase contract, but a contract committing you to buying the property at a future date and when the property has been completed. Any stage payments are an unsecured loan to the builder and it is important that your solicitor confirms that the builder has obtained a bank or insurance guarantee.

Remember that many builders do not do this. Mortgage Lenders will not normally finance the stage payments during the construction period. However, we can obtain up to 70% – 80% maximum once the property is completed and registered even if you have paid more than 20% in stage payments. It may be possible to arrange a re-mortgage of your UK property for the amount to cover the stage payments if you have insufficient savings.

It is important to be aware that a new property cannot be registered until the ‘Certificate for First Occupation’ has been issued in most cases. This can sometimes take 2 or 3 months and maybe longer after the property has been completed and the certificate issued by the local town hall. This needs to be chased so that you do not experience problems and delays with completion. This is the way to proceed but some less honest builders will try to make you pay before the certificate has been issued which is not possible if you need a mortgage.

If you are buying a country property then it must be registered as a “Vivienda” (residential dwelling) in order for it to be mortgageable. If the property is not registered a vivienda, but just agricultural land then legally the building does not exist and consequently cannot be mortgaged. This is why we ask to see a copy of the “Note Simple” (the extract from the Property Registry) You will need to obtain these documents whilst you are in Spain and forward them to me if possible. If a country property is not registered as a vivienda then you must consult your independent solicitor.

An enquiry does not commit you to anything at this stage and you do not have to wait until you have found the property before you send the enquiry. You can send it in advance so that I can consider issuing an “approval in principle” based on your current financial situation, before you commit yourself to a purchase.

Finally, a mortgage takes about 6 weeks from start to finish due to the time it takes to gather all the relevant documents. We look forward to hearing from you.

Please feel free to contact us without obligation

MORTGAGE GUIDE Part 1

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Mar 162009

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.