spanish mortgages

[metalmonkey]

hi

I have searched the archives so please excuse me if this topic has been 'done to death'.

Has anyone out there got any advice on applying for a spanish mortgage. We have an account with santander and an NIE number already so thought the Abbey may have some advice...big mistake...it seems easy to get a mortgage if you are actually releasing equity in your UK property but not if you want a mortgage on a spanish property without the back up of a UK property (sorry if this doesn't make sense) .

We are selling our UK home and have been advised by our financial man not to put all our money into a spanish property but to put part of it in and have a mortgage for the rest...which will mean that we do have some funds for a 'rainy day' has anyone else done this

thanks

Julie

[Beachcomber]

This is typical of the advice you get from the financial services industry both in Spain and, it appears, in the UK and is almost as bad as the constant attempts of certain so-called financial advisers on the coast to flog dodgy equity release schemes.

You have, at least, found out about Abbey without having to do it the hard way. You can go to almost any Spanish bank and apply for a mortgage and as long as the property stands up to an above-board valuation you should have no trouble getting a mortgage of up to about 70% of the assessed value (which may be considerably less that the supposed market value).

If this does not produce sufficient funds you will find various mortgage brokers who will arrange for an inflated valuation upon which the unsuspecting? bank will lend their 70% which could well pan out to more than the market value. Result? Instant negative equity and the repayment of a mortgage which would not be covered if you found that you needed to sell the property sooner than expected for some reason.

If you have the funds available my advice would be to purchase the property outright. Obtaining a mortgage just to give you 'something left over for a rainy day' may induce a false sense of well-being but, in my opinion, it is a recipe for financial disaster.

Just add up the set-up costs, legal fees and interest you will be paying over ten, fifteen or twenty years and add the cost of the paperwork involved in cancelling the mortgage if and when you finally pay it off.

OK, if the legal profession, estate agents and the financial services industry had to live off the income they get from the likes of me they would be in for a pretty lean time and I admit to being totally biased against and having absolute contempt for each of them and this could be said to cloud my judgement.

This reply may not have been much help to you but at least your post has given me another opportunity to let off steam!

[ian.wilson]

Hi metalmonkey,

One more thing required for a Spanish mortgage is proof you can pay it back ie. Contract of Employment or if self employed the relevant paperwork to prove your earnings say from your accountant.

Regards
Ian

[metalmonkey]

Hi many thanks for that...will have to have a bit of a re think

Monkey

[jwsp]

Our friend Beachcomber has some valid points, and an opinion based on previous experience I guess

However, a couple of things. First any bank will, as has been said, like to see some evidence of how you intend to repay the loan. So a job (with contract) or accounts if you are self employed are needed.

The other "issue" is the financial cost. Beachy is right when he talks of re-payment costs and set up fees, but you should work these out and then work out what return you would see on your funds. And, the funds should be invested with as much capital protection as possible. You really don't want to be taking a punt on money you will need in the future. If the numbers work out and you can borrow then do it, if they don't then pay cash.

Its not an easy question to answer really, as if you are 40 your situation and any advice you get will be different to that of a 65 year old.

One thing I do agree with him on though, stay far far away from the so called "experts" here on the coast, namely some of those that have a regular column in the SinE. Get yourself a UK regulated firm for products, and a Spanish accountant for advice.

Last thing, nope I've never been a Financial Consultant or anything close...just spent some time working this all out for myself recently.

[Beachcomber]

Yes, jwsp, previous experience certainly but not to my own detriment I am glad to say. Like you I do my own research and make up my own mind purely as an amateur.

Although I think it is a left-wing gutter press rag and usually avoid reading it there was an interesting article about so-called equity release schemes in last week's Euro Weekly News which was brought to my attention by a friend who isn't quite so discerning.

[Chalky]

Has anyone out there got any advice on applying for a spanish mortgage.

Before you go rushing to a Spanish bank, check out Barclays or the Halifax.

We got (semi-) railroaded into a non-residents' mortgage with Banco de Andalucia, and the best interest rate they will/would offer us is 4.5%, whereas Barclays quote Euribor + .75%, which works out at about 3.2%. For a residents mortgage the rate is even better.

[marios]

Be careful with banco Halifax Hispania as the neglect to tell you about all the charges,every stage payment into my account attracts a fee of 1,000 € for notary etc,(why I need this to to electronically transfer money in is beyond me)they never told me this when I applied for a construction motgage fortunately I only have 3 of these maybe only 2 but I am not happy with them at all,look elsewere is my advice

[ian.wilson]

Also onr thing to remember is that the Hailfax and Barclays have nothing at all to do with the same banks in the UK, they are just franchises paying to use the name. A friend used them an had nothing but huge bank charges every time they made a transaction. As a Resident my best deal came from the Banco de Andalucia, find the customer service good to. I do speak fluent spanis though (that may help).

[Chalky]

Also one thing to remember is that the Hailfax and Barclays have nothing at all to do with the same banks in the UK, they are just franchises paying to use the name

So why does the Barclays in Spain website - part of the Barclays Worldwide website, say

Welcome to Barclays Spain, a finance entity owned by Barclays PLC

[El Cid]

Also one thing to remember is that the Hailfax and Barclays have nothing at all to do with the same banks in the UK, they are just franchises paying to use the name

So why does the Barclays in Spain website - part of the Barclays Worldwide website, say

Welcome to Barclays Spain, a finance entity owned by Barclays PLC

And Halifax says this:-

Banco Halifax Hispania was set up in 1993 as a subsidiary of Halifax plc,

Sid

[ian.wilson]

Hi,

I am only going on what their Bank Managers told me when I applied for a mortgage, a friend of mine has also been told the same when he applied for a mortgage (he was also refused after proving income of nearly 40,000 pounds a year).