Mortgages in Spain

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This topic contains 25 replies, has 5 voices, and was last updated by Profile photo of Anonymous Anonymous 8 years, 6 months ago.

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  • #53936
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    Anonymous
    Participant

    What is the current situation? I heard all kind of stories of sale processes falling due to people being denied credit.

    If one has proper payslips and asks for decent mortgages, what is the reason
    for being denied?

    Also, I know that the mortgages are scarce but one can still get some offers and needs to act fast in accepting it or not. Does in Spain work differently?
    Can they offer some money and then withdraw the offer after couple of weeks?

  • #82350
    Profile photo of Anonymous
    Anonymous
    Participant

    Ralita, from my own experience I have found the banks becoming a little more flexible again.

    I think the panic has subsided as the banks realise that selling mortgages is their business, or at least a large part of it.

    The talk of 60% LTV for non res applicants is untrue as I just got a client 80% with a decent experian report. In reality banks are very welcoming of clients with honest and normal income proof.

    The UK banks in Spain, particularly Barclays are being reasonable and realistic regarding applications, closely followed by Bankinter.

    If anyone is planning on a mortgage application, my advice would be to provide

    1) Experian report (if non res)
    2) Good genuine proof of income.
    3) A good reference from UK bank (if non res)

    Another anaomalie is that banks are varying from branch to branch.

    Use a large town or city branch for your application, they usually have go-ahead managers who can push the application if a bit iffy, as head offices listen to good managers.

    Small provincial and village branches usually have a young inexperienced manager or one on the way down and they have little influence on the application.

    I also suggest applicants use a broker, it may cost 1% more in set-up fees but often a good broker can strip away the associated products that banks usually insist upon, such as Life insurance, employment protection etc.

    I got a client a mortgage last week for 180.000€ which could have carried 3,750€ worth of bank add-ons, instead he paid 1% extra set-up fee 1,800€ and so saved 1,950€ that he would have paid in extras by going directly to the bank.

  • #82351
    Profile photo of Anonymous
    Anonymous
    Participant

    “Use a large town or city branch for your application, they usually have go-ahead managers who can push the application if a bit iffy, as head offices listen to good managers.” – But when the finance market is in such a poor state of health, why should any manager “push” an “iffy” application.
    If the applicant is “iffy”, why not just show them the door. If they are “iffy” to start with, what happens if the market deteriorates?
    A.) Hand the keys back and expect to walk away from debt. Like Hell. Don’t lend to them.

  • #82355
    Profile photo of Anonymous
    Anonymous
    Participant

    @mg wrote:

    “Use a large town or city branch for your application, they usually have go-ahead managers who can push the application if a bit iffy, as head offices listen to good managers.” – But when the finance market is in such a poor state of health, why should any manager “push” an “iffy” application.
    If the applicant is “iffy”, why not just show them the door. If they are “iffy” to start with, what happens if the market deteriorates?
    A.) Hand the keys back and expect to walk away from debt. Like Hell. Don’t lend to them.

    There is iffy and there is iffy mg.

    Using another case to illustrate. I had a client who owned 2 properties outright, total value 365,000€.

    She works part time with no pay slips to prove personal income. She has the chance to buy the business she works for, which is very profitable.

    So, any normal bank would refuse to look at it because there is no proof of income. Even though she is “equity rich” – the banls needed proof of earnings.

    I took the modelos of the current owner to the bank to prove future/possible earnings to her existing local bank – they refused it. I took the same details to my preferred branch of the same bank and it was approved.

    That is my kind of iffy mg, I don´t deal in the seedy world of no-hopers.

    As I said, there is iffy and there is iffy!!

  • #82356
    Profile photo of katy
    katy
    Spectator

    I would never use a broker, 1% or more 😯 I think you would have to be so desperate to do that it may be better to not purchase.

  • #82358
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    I would never use a broker, 1% or more 😯 I think you would have to be so desperate to do that it may be better to not purchase.

    I understand your reservations katy, however, a good broker can get better terms than a bank is allowed to offer over the counter.

    It takes alot of time to build a relationship with a faceless bank. But as I said, just stripping away the banks associated products will save an applicant money. To get a more favoutible interest rate will save a lot more.

    1% – brokers fee on a 100,000€ mortgage will cost a customer 1,000€ – maybe even less as a bank will normally charge .5% for themselves, I have the banks down to .35% for themselves so my clients only have to pay .85% , equal to only 850€ for my work, yet when you look at stripping away 3750€ worth of banks products, plus a rate of 5.15% negotiated by me as opposed to the banks over the counter 5.35% then the client is nearly 4000€ better off in the first year alone.

    It´s like the old RE agent argument that prevails, a good agent will get the buyer a good deal, there is no difference when it comes to a good broker.

  • #82359
    Profile photo of Anonymous
    Anonymous
    Participant

    OK. so your client may only work part time. Why no pay slip or have records of payment?
    Is it cash she is paid and is it declared 100%

    You client owns 2 properties outright, total value 365,000€. Does your client use both or is there a rental from one perhaps, which could be included as registered income?

    “Even though she is “equity rich” – the banks needed proof of earnings.” Does that mean you consider the bank to be out of order in protecting investors and savers interests?
    Should they lend to anyone who does not have proof of income to support the loan?
    Assuming the business is less than say 70% the value of the properties, and considered very profitable, why not consider offering the premises as collateral?
    Or, if you consider it a fail-proof venture, why not fund the acquisition against the deeds, yourself.

    Katy, certainly agree with you there. More often than not, people use brokers when failed elsewhere and it is their last option.

    “a good broker can get better terms than a bank is allowed to offer over the counter. ” and that is one that dates back to double glazing sales people, and any other sales who use whatever words necessary and in the end, they convince themselves.
    A good risk to the bank will get good rates and possible better than brokers could offer.

  • #82360
    Profile photo of Anonymous
    Anonymous
    Participant

    @mg wrote:

    OK. so your client may only work part time. Why no pay slip or have records of payment?
    Is it cash she is paid and is it declared 100%

    You client owns 2 properties outright, total value 365,000€. Does your client use both or is there a rental from one perhaps, which could be included as registered income?

    “Even though she is “equity rich” – the banks needed proof of earnings.” Does that mean you consider the bank to be out of order in protecting investors and savers interests?
    Should they lend to anyone who does not have proof of income to support the loan?
    Assuming the business is less than say 70% the value of the properties, and considered very profitable, why not consider offering the premises as collateral?
    Or, if you consider it a fail-proof venture, why not fund the acquisition against the deeds, yourself.

    Katy, certainly agree with you there. More often than not, people use brokers when failed elsewhere and it is their last option.

    mg – mg – mg- relaxs for heavans sake. No one is conning, deceiving or trying to bring down a large banking institution for goodness sake.

    The fact was in my clients case, she fell foul of the proof of income requirement. She was only trying to buy a business that she had worked for for 8 years. The employer/owner was not prepared to pay all the associated costs that the Spanish socialist draconian laws state he should pay just to employ her for 15 hours per week, it would virtually cost him the same again as her wages to do it officially. She was quite happy with the arrangement.

  • #82361
    Profile photo of Anonymous
    Anonymous
    Participant

    @mg wrote:

    “a good broker can get better terms than a bank is allowed to offer over the counter. ” and that is one that dates back to double glazing sales people, and any other sales who use whatever words necessary and in the end, they convince themselves.
    A good risk to the bank will get good rates and possible better than brokers could offer.

    What a seemingly suspicious little fellow you are mg.

    Clearly you do not understand the principle of profit for effort???

    Try looking in an encyclopedia for the explanation of “conducting business” Alternatively, you could look up “soviet state farming”, both would be more enlightening than reading the “Anglian Windows Brochure” that has obviously just dropped through your letterbox 😆

  • #82362
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    Anonymous
    Participant

    @peter Good wrote:

    @mg wrote:
    OK. so your client may only work part time. Why no pay slip or have records of payment?
    Is it cash she is paid and is it declared 100%

    You client owns 2 properties outright, total value 365,000€. Does your client use both or is there a rental from one perhaps, which could be included as registered income?

    “Even though she is “equity rich” – the banks needed proof of earnings.” Does that mean you consider the bank to be out of order in protecting investors and savers interests?
    Should they lend to anyone who does not have proof of income to support the loan?
    Assuming the business is less than say 70% the value of the properties, and considered very profitable, why not consider offering the premises as collateral?
    Or, if you consider it a fail-proof venture, why not fund the acquisition against the deeds, yourself.

    Katy, certainly agree with you there. More often than not, people use brokers when failed elsewhere and it is their last option.

    mg – mg – mg- relaxs for heavans sake. No one is conning, deceiving or trying to bring down a large banking institution for goodness sake.

    The fact was in my clients case, she fell foul of the proof of income requirement. She was only trying to buy a business that she had worked for for 8 years. The employer/owner was not prepared to pay all the associated costs that the Spanish socialist draconian laws state he should pay just to employ her for 15 hours per week, it would virtually cost him the same again as her wages to do it officially. She was quite happy with the arrangement.

    And she declares all for tax purposes?
    You also failed to give a respone to the query regarding rental income?

    “Clearly you do not understand the principle of profit for effort???” If you say so, must tell that one to the professional advisors we use and are retained by us. Could give as much entertainment as telling them a broker can can a better deal from a bank.

    What about protecting savers and investors interests. Should they lend, especially in the current climate, to someone who “falls foul”?

    “Try looking in an encyclopedia for the explanation of “conducting business” Alternatively, you could look up “soviet state farming”, both would be more enlightening than reading the “Anglian Windows Brochure” that has obviously just dropped through your letterbox ” Sorry, do not read the brochures that you are familiar with, for whatever the reason.

    PS. Me, totally relaxed at the humour in the comments and claims.

  • #82363
    Profile photo of Anonymous
    Anonymous
    Participant

    mg – you are in one of those naughty rebellious moods again, leave it to the people that do it for real and have yourself another family size whisky 💡

    Night all.

  • #82364
    Profile photo of Anonymous
    Anonymous
    Participant

    But what about:
    And she declares all for tax purposes?
    You also failed to give a respone to the query regarding rental income?
    What about protecting savers and investors interests. Should they lend, especially in the current climate, to someone who “falls foul”?

    Is that why the first bank said no. There was no response?

    Do what for real?
    If you mean arrange loans for someone who “falls foul”. Certainly would not want to be involved in that type of business.

  • #82367
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    Anonymous
    Participant
    Peter Good wrote:
    Ralita, from my own experience I have found the banks becoming a little more flexible again.

    Hi Peter,

    thank you for your answer.

    Is there a minimum amount that one could borrow? I know in UK many banks have a £50K minimum.

    I also know there is a 35% of the salary threshold. Are they strict with this limit?

  • #82373
    Profile photo of Inez
    Inez
    Participant

    Banks do not use rental income as income. If a buy to let landlord tries to raise a mortgage in Spain, the debt of the mortgage is taken into consideration and not the rental income – this is in the main for the spanish banks and not the gibraltan ones.

    Most banks are also requiring Cirbe reports and spanish experians to ensure there is no more debt undeclared.

    As the criteria has changed and tightened, people who were obtaining finance are being denied. Onlt good prospects are approved, and even this with hassle and changes as you go along.

    Many who were ‘guaranteed’ finance on their off plans 2 years ago are unable to compelte and are refused a loan now.

    The banks are tightening and many are unable to approve in the branch – it goes to hq!

    Halifax are concentrating on savers for the timebeing. Few are offering 80% and if it is its ot at 100% of purchase contract price but at 90% or less.

    Quite a problem to be sure!

  • #82385
    Profile photo of Anonymous
    Anonymous
    Participant

    @inez wrote:

    Banks do not use rental income as income. If a buy to let landlord tries to raise a mortgage in Spain, the debt of the mortgage is taken into consideration and not the rental income – this is in the main for the spanish banks and not the gibraltan ones.

    Most banks are also requiring Cirbe reports and spanish experians to ensure there is no more debt undeclared.

    As the criteria has changed and tightened, people who were obtaining finance are being denied. Onlt good prospects are approved, and even this with hassle and changes as you go along.

    Many who were ‘guaranteed’ finance on their off plans 2 years ago are unable to compelte and are refused a loan now.

    The banks are tightening and many are unable to approve in the branch – it goes to hq!

    Halifax are concentrating on savers for the timebeing. Few are offering 80% and if it is its ot at 100% of purchase contract price but at 90% or less.

    Quite a problem to be sure!

    I assumed that as it said “I had a client who owned 2 properties outright, total value 365,000” that there was no mortgage, therefore, the rental income would be considere as income and that the equity would also be taken into consideration?

  • #82388
    Profile photo of Inez
    Inez
    Participant

    Equity sometimes. There was a bank who recently in the last few months came out with an interest only, Think it may have been the TSB, BUT you could only get it if you had an unecombered other property AND signed the loan to it meaning you couldnt sell it! Has to be spanish property as well!

    Then the product got withdrawn when they realized how daft that was!

    Very few take tenancies into consideration. If there is a shorthold 6 month tenancy and proof its being paid maybe, but its subject to being in a company name and then they look at it as income

    Its like a husband paying maintenance has that seen as debt, but if his current wife has maintenance, thats not used!

    You work it out! And I thought dealing in property was quirky!

  • #82394
    Profile photo of Anonymous
    Anonymous
    Participant

    @ralita wrote:

    @peter Good wrote:
    Ralita, from my own experience I have found the banks becoming a little more flexible again.

    Hi Peter,

    thank you for your answer.

    Is there a minimum amount that one could borrow? I know in UK many banks have a £50K minimum.

    I also know there is a 35% of the salary threshold. Are they strict with this limit?

    Hi Ralita,

    Generally the minimum you can borrow is around 25,000€ though it does vary from bank to bank and also the type of mortgage such as; interest only or normal repayment.

    Banks are also more keen to peg the repayments to salary as you mention in your second question – as far as I can remember the scale is as follows;-

    25% for earning up to – €12,000pa
    35% for earnings up to – €20,000pa
    45% for earning up to – €50,000pa

    I have come across a couple of banks that are prepared to go to 50% for higher earners.

    Only mortgage repayments are counted when considering existing outgoings, personal loans and other household bills do not effect the ability to pay considerations.

  • #82395
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    Anonymous
    Participant

    To clarify a point mg is making, my client in the case of 2 properties doesn´t rent out either as she lives in one and her partner is currently using the other, any more information and I fear I am saying too much.

  • #82397
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    Anonymous
    Participant

    But what about:
    And she declares all for tax purposes?
    What about protecting savers and investors interests. Should they lend, especially in the current climate, to someone who “falls foul”?
    So are the 2 houses in the ownership of one person?

  • #82402
    Profile photo of Anonymous
    Anonymous
    Participant

    But what about:

    And she declares all for tax purposes?

    Declares all what mg? More importantly I don´t care that´s her business not mine. I don´t work for the tax office nor would I wish too!

    What about protecting savers and investors interests. Should they lend, especially in the current climate, to someone who “falls foul”?
    So are the 2 houses in the ownership of one person?

    Again mg, I don´t work for the banks so I don´t care about their fragile enterprise any more than they care about mine!!

    You worry far too much mg about the banks being decieved. They should be more careful and consistent in the way they go about conducting their business and not expect soft chancellors and the tax payer to bail them out in difficult times especially when they treat us like 5hite when they are making huge profits. I side with the borrower all of the time and make sure the banks are not deceiving them with their hidden costs.

  • #82408
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    Anonymous
    Participant

    “Declares all what mg? More importantly I don´t care that´s her business not mine. “
    You may not, so why would you believe that the bank should take the same attitude. No income, no loan.

    “Again mg, I don´t work for the banks so I don´t care about their fragile enterprise any more than they care about mine!! “
    But as you claim to have special relationships with banks, surely you know the way they operate and what they expect from someone who requests a loan.

    “You worry far too much mg about the banks being decieved. “
    I asked questions and did not claim deception, only you and your client know the truth.

    “They should be more careful and consistent in the way they go about conducting their business”
    And when they are, you slag them off for not giving your client a loan.

    “treat us like 5hite” – So the people you claim a close relationship and preferential terms from, treat you like “5hite”. Quite unbelievable.

    “I side with the borrower all of the time” – You would if you get a fee for every loan you can arrange. Surely that is common sense?

    “and make sure the banks are not deceiving them with their hidden costs.”
    Are you sure that your claims of preferential treatment are correct.

  • #82410
    Profile photo of Anonymous
    Anonymous
    Participant

    @mg wrote:

    “Declares all what mg? More importantly I don´t care that´s her business not mine. “
    You may not, so why would you believe that the bank should take the same attitude. No income, no loan.

    “Again mg, I don´t work for the banks so I don´t care about their fragile enterprise any more than they care about mine!! “
    But as you claim to have special relationships with banks, surely you know the way they operate and what they expect from someone who requests a loan.

    “You worry far too much mg about the banks being decieved. “
    I asked questions and did not claim deception, only you and your client know the truth.

    “They should be more careful and consistent in the way they go about conducting their business”
    And when they are, you slag them off for not giving your client a loan.

    “treat us like 5hite” – So the people you claim a close relationship and preferential terms from, treat you like “5hite”. Quite unbelievable.

    “I side with the borrower all of the time” – You would if you get a fee for every loan you can arrange. Surely that is common sense?

    “and make sure the banks are not deceiving them with their hidden costs.”
    Are you sure that your claims of preferential treatment are correct.

    Yet again mg I have become tired of your rudeness.

    Subject closed again as usual!

  • #82411
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    Anonymous
    Participant

    Hi Peter,

    thank you again for your answers.

  • #82416
    Profile photo of Anonymous
    Anonymous
    Participant

    What is rude about asking questions and quoting you?
    “Declares all what mg? More importantly I don´t care that´s her business not mine. “
    You may not, so why would you believe that the bank should take the same attitude. No income, no loan.

    “Again mg, I don´t work for the banks so I don´t care about their fragile enterprise any more than they care about mine!! “
    But as you claim to have special relationships with banks, surely you know the way they operate and what they expect from someone who requests a loan.

    “You worry far too much mg about the banks being decieved. “
    I asked questions and did not claim deception, only you and your client know the truth.

    “They should be more careful and consistent in the way they go about conducting their business”
    And when they are, you slag them off for not giving your client a loan.

    “treat us like 5hite” – So the people you claim a close relationship and preferential terms from, treat you like “5hite”. Quite unbelievable.

    “I side with the borrower all of the time” – You would if you get a fee for every loan you can arrange. Surely that is common sense?

    “and make sure the banks are not deceiving them with their hidden costs.”
    Are you sure that your claims of preferential treatment are correct

    Are you sure you are not an agent or maybe a politician, insomuch as when questioned, walks away, rather than back up their statements and claims?
    I am begining to think that perhaps I can understand why it was a bank believed your client “fell foul”

  • #82417
    Profile photo of Anonymous
    Anonymous
    Participant

    Sorry mg, why did you need to turn a genuine question into a boxing match??

    Please do not highjack anymore of my threads. Create your own and criticize there if you wish.

  • #82418
    Profile photo of Anonymous
    Anonymous
    Participant

    If asking questions and requesting facts denotes a boxing match, then gloves are on.
    I just thought that it would be better to have all facts and not just half a story.
    The question. Well if you can afford to repay a loan and it is considered a worthwhile acquisition, there are no problems whatever the Country. Money remains available.
    If you can’t afford the repayments and can’t provide evidence to support, why should any bank lend money to you, irrespective of the climate.
    Put yourself in the driving seat (the bank). You have what 2 customers want.
    Customer 1 has a steady job. 40K p.a. income.
    Customer 2 had worked for for 8 years, no payslips.
    Who would you lend your money to?

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