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Spanish mortgage deals 2020

Spanish mortgage deals for Q4 2020: There is a good choice of properties and mortgages from Spanish banks and with more building starts – and restarts of recession troubled sites – from developers for any year in the last decade Spanish property buyers are returning to the market despite the impact of Covid-19. Plots in prime locations are well-priced and 100% mortgages on the building costs are available. 

Best buys – New apartments and villas from leading banks who have taken charge of developments under construction where developer loans are in default. Brand-new, some with years of construction guarantees, these homes are excellent value with peak to present discounts around 35%.

  • Resale homes can generate up to 70% LTV and brokers are offering rates for high rated clients from 1.5% fixed for up to 20 years. Interest rate from 1.3% variable up to 30 years. On 500K plus 9% purchase tax.
  • New build development, finance depends on the current specific deals from the developer or as above. On new properties 10% VAT.
  • Plot to build: client buys plot outright with cash, becomes the promoter and has the selected villa built to turnkey project for the price all included. 21% vat on plot and 10% on the build. Up to 100% finance for building costs is possible. 

With mortgage deals from the vendor banks around 3% APR and now fixed interest for 20 years from Hola Bank, the English speaking specialist, property buyers are being tempted to buy a property in Spain once again. Best interest rate for Q4 2020 is 1.9% variable for a 60% loan or 2% for 70% loan. Walkerspain.com buyers can be pre-qualified for their Hola Bank mortgage as part of a Purchase Ready service that smooths the way to a successful purchase and the most suitable mortgage.

Offers – Spanish banks want the properties off their books and will listen to realistic offers. These are formally submitted to special committees that meet weekly and will generally provide an answer with two weeks. However, as the selected property remains on the market, there is the chance it may sell directly off the website or through a higher submitted offer.

Legal – All bank controlled property is fully legal and as such qualifies for generous mortgages as shown here. However, we advice all buyers to hire their own independent Spanish solicitor to check all paperwork, undertake conveyancing and registration and assist with utility provision etc. We can provide firms who have assisted previous buyers successfully.

Endeudamiento/DTI – This is the debt-to-income ratio, and is the percentage of your net income which your total mortgage and loan payments will represent. For example, if your net income is 3000 Euros per month, you already pay 750 Euros per month for your existing mortgage, and the mortgage applied for will have repayments of 250 Euros per month, your Endeudamiento/DTI will be (250+750)/3000 = 33%.  NB – if you are renting out a property longterm, some banks may also include part of your rental income in this calculation.

:  : All offers subject to buyer status and availability.

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Spanish bank bargains, but make sure they are legal

Spanish bank bargains, but make sure they are legal

Spanish bank bargains, but make sure they are legal : : Repossession property bargains have helped to restore the Spanish real estate market to almost its peak level of 2007 with very few legal problems for purchasers. That was mainly because the vendor banks had massive legal departments to ensure the properties on offer were fully legal or were made so.

The lawyers checked all the paperwork and despatched valuers to make sure the villas and apartments matched the relevant documents. The resultant valuations averaged 44% below the peak years of 2007-2008. Great discounts, so it wasn’t surprising buyers were tempted and that their Spanish solicitors found few legalities over which they could hassle down the price. Led by property hotspot Marbella, town hall planners compiled lists of legally built properties and made them available to buyers’ legal representatives. By default, the remainder should be double checked or avoided.

Specialist international brokers, Walker Property Spain declared all their property offerings to be “fully legal” and that “No client has ever lost a deposit or been financially disadvantaged”. Advice to “use a Spanish solicitor” from the start of the buying process came with well honed purchase management services to smooth out any wrinkles with the banks.

Know the history of Spanish bank bargains

Even with the huge discounts on offer, purchase of a repossessed property remains a serious consideration. Buyers should remain vigilant on planning consents, construction standards and permissions. Headlines a few years ago highlighted demolition orders on illegally built villas and owners trying to stave off the bulldozers.

Knowing the history of the property, its current legal state and any proposed nearby further development is vital work for every buyer’s Spanish solicitor.

Columbus finca deeds made legal

Madrid lawyer, Javier de Juan, was retained by the UK purchaser of the Mallorca Estate of the Christopher Columbus family. The property dated back to Roman times and beyond. The first name on the deeds to Son Colom da Sa Cove is Jaime Colom, uncle of Cristobal Colom – Spanish for Christopher Colombus.

It took three months to bring the ancient deeds up to date. They included cave dweller residences, a Roman silver mine, medieval alterations and additions, many boundary changes. Lawyers worked closely with the Mallorca property registry to produce the most accurate and up to date deeds in the history of Son Colom da Sa Cove.

Legal – All bank controlled property is fully legal and as such qualifies for generous mortgages as shown here. However, we advice all buyers to hire their own independent Spanish solicitor to check all paperwork, undertake conveyancing and registration and assist with utility provision etc. We can provide firms who have assisted previous buyers successfully.

Endeudamiento/DTI – This is the debt-to-income ratio, and is the percentage of your net income which your total mortgage and loan payments will represent. For example, if your net income is 3000 Euros per month, you already pay 750 Euros per month for your existing mortgage, and the mortgage applied for will have repayments of 250 Euros per month, your Endeudamiento/DTI will be (250+750)/3000 = 33%.  NB – if you are already renting out a property longterm, some banks may also include part of your rental income in this calculation

Author: Elliott Barnett, international property writer | Image:: Bank-owned bargains at Valle Romana, Costa del Sol with sea and golf views