Maximum mortgage & interest only?

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This topic contains 13 replies, has 8 voices, and was last updated by Profile photo of Anonymous Anonymous 10 years, 3 months ago.

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  • #52182
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    I’ve seen the property I would like to buy on the Costa Dorada. The price is 235K Euros so I expect about 25k on top to make it 260k. Can I get a mortgage of 85 to 90% interest only in Spain on the 235k or 80% on the total price of 260k?

    Everything I have seen so far is 80% of the 235k.

  • #65378
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    Hi Lenny,
    my understanding is that as a foreigner you are only entitled to 70% mortgage, however, the one way around this is “ltv” or loan to value

    if your property was valued above the asking price you could get 70% of the valuation figure(thereby making it a higher percentage mortgage)

    as far as the fees are concerned, they are totally seperate from your mortgage even if you got a 100% mortgage you would still have to come up with the 10-13% for solicitors, stamp duty and vat etc

    i’m pretty sure this is how it works if i’m wrong i’m sure someone will correct me

    Chilly 8)

  • #65388
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    Hi Lenny & Chilly

    We have found that things vary from bank to bank, and that whilst they obviously charge for their services Mortgage Brokers can sometimes get incredible deals. Without doubt if its a striaghtforward no more than 70% of purchase price morgage required go direct to the banks but tout your business around as they are all keen for it.

    Some banks offer 70% of purchase price, some 80-85%, some will lend 70-80% loan to value (using this example they will normally ask for expirion credit report) and as I say some brokers can do even better one is offering 100% even for non nationals up to a max of (I think the figure was) 240,000 euros. Just remember that the more you borrow relative to purchase price the tougher the controls get, also bear in mind interest rates are on a bit of an upward trend so dont overstretch, dont want to loose that Spanish dream becuase you cant keep up the payments.

    Jim

  • #65389
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    Hi Lenny

    sorry just realised I didnt read all your question, with interest only your options are more limited, the higher the loan to value the lower the period of interest only you will get. The max I am aware of of is Halifax Espana with 10 years but I believe this only applies to max 70% of purchase or valuation whichever is the lower and cannot include costs. If you want to need to max out on your borrowing expect short periods of interst only.

    Jim

  • #65395
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    Sorry to butt in on this thread but I’m interested in finding out about Spanish mortgages.
    Jiminspain, you say that some lenders will offer 70 or 80%.
    What sort of time period could be applied to a loan like that? The reason that I ask is I will be retiring to Spain in about five years and everything that we have is tied-up in the UK house so we’ve very little cash until the house is sold.
    My plan was to sell-up completely, move to Spain and renting in the area that I’m interested in at first but this of course eats into whatever savings we have by then and that’s the drawback of that plan.

    If we could get a mortgage set up, find a house or whatever in a carefully researched area (which we’ll have done well before-hand) move over to Spain THEN put our house in the UK on the market my wife would probably feel a lot happier! If we could then pay-off the Spanish mortgage once the UK house is sold, probably incurring a bit of a penalty payment perhaps; it could possibly be a better way for us to consider the move.
    Paying a Spanish mortgage for a few months would probably work out cheaper than renting a property from what I’ve seen of the Spanish rental market wouldn’t it?
    Thanks,
    stevmk2

  • #65396
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    stevmk2

    Dont know your age but Spanish mortgages are in some ways more flexible than the UK. Morgages are often available up to 30 or in some instances 40 year terms and up to a max age of 70 years. All of this of course is subject to you being able to demonstate your ability to service the mortgage, in the circumstance that you describe e.g. retiring you would need to provide some source of income for the bank to consider a mortgage. Other points to consider is that the bank will charge an arragement fee often 1% (refered to as opening commision) and normally an early redemtion fee often 1% so you need to balance all this against your decisions.

    Jim

  • #65418
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    Hi Jiminspain,
    my head’s spinning from all that info.

    could you pm me the name /details of the broker(or bank) that is offering 100% mortgages

    do you have any details of criteria or conditions for such a deal

    many thanks Chilly 8)

  • #65419
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    Could you also forward 100% contact to me please.

    Len

  • #65424
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    Jim,

    What do you know about this broker offering 100%? Is it bona fide?

    One has to be extremely careful with anyone offering 100% these days – if it looks to good to be true, then it probably is. Same old story.

    Of late the 100% mortgage has been a favourite with hucksters. The unfortunate reality is that most people who need a 100% mortgage are under pressure, and sharks take advantage of this. The trick is you pay an upfront administrative fee, say 500 or 1,000 Euros, but then, surprise surprise, due to something in the small print you don’t get the mortgage, yet the admin fee is non-refundable.

    Mark

  • #65426
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    Hi All,

    In my region banks like Cam/Inter/Valencia etc will normally only go to 70% as a maximum for a foreign person. In some cases in can be 80% on a finished property but this is rare now and Cam have told me that they will be lowering their rate to 70% maximum. This is beacuse they feel they are too much at risk of being left with a repossed property worth less than the mortgage or at least hard to sell in todays market, and the foreign pesron has left the country.

    The only time I have heard of a 100% mortgage has been with some very dubious tactics. The broker would get a valuation way over the price from a friendly valuation agent or get a valuation figure of the property price, say in 2 years time when it is finished (this is for off plans)

    The banks are aware of these practises and I dont think it could be recommended to go down a route that involves some dubious tactics.

    In my opinion if someone can offer 100% the alarm bells should start ringing.

    Best wishes

    Bernard

  • #65441
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    I will get the info when I go to the office Monday, perhaps if the broker has no problem and Mark has no problem it should be posted on the forum!

    Jim

  • #65449
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    Send it to me first by PM please Jim. I’d like to check it before it is made public.

    Mark

  • #65540
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    Hi everyone

    Cajamar are offering 95% mortgages for upto 30 years and upto 40% of your available monthly income. (ie if you have a monthly income of 1000 euros they will ocnsider payments upto 400 euros per motnh which equates to about 80,000 depending on interest rates). It is available for upto 30 years and you can get fixed rate interest and before anyone accuses me of working for Cajamar or even a mrotgage broker – I dont. I just know they do a good deal.

    There are others around also – shop around and you should be able to find something

    Vince

  • #65554
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    I am finding 85 percent loans on generous valuations are still available from the big building societies or cajas de ahorras. My hot tip here is to try out-of-region building societies – that is to say, the Caixa de Galicia in Valencia and the CAM in Galicia and so on.

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