[Anonymous]

Is the merry-go-round starting up all over again? I’m beginning to see a few property adverts stating:

No mortgage payments and 0% interest for 3 years.
Buy in 2010 and benefit from the bank´s incredible mortgage offer – no interest charged and no capital payments until 2013.
No opening fee.
Up to 90% finance subject to status.
Owner: Blanca Mortgages.

This one was for a 4-bed, 3 bathroom luxury apartment as new in the heart of Valencia, 733,000 euros.
90% finance on a 733,000 euro property? I wonder how stringent there ‘subject to status’ regs. are…..

For sure they’ve built in the ‘no interest charged for 3 years’ and the opening fee into the asking price, just who are they trying to kid. 😆

[Anonymous]

I’m start to see quite a lot of these kind of offers on bank repo properties, which I’d guess this is.

The banks are starting to get desperate to shift these places. The don’t want to reduce the selling price as that would hit their assett base so they are offering sweeteners such as this.

[Anonymous]

@brianc_li wrote:

The don’t want to reduce the selling price as that would hit their assett base so they are offering sweeteners such as this.

That is exactly what is happening, though I should add that in many of these offers, banks have taken a hit, just not a big enough hit.

[adiep]

Of couse it has the effect of stuffing the general resale market, because the mortgage deal are not as good, so this will force resale prices down.

[Chris M]

@adiep wrote:

Of couse it has the effect of stuffing the general resale market, because the mortgage deal are not as good, so this will force resale prices down.

Not necessarily.

There is a project on the CDS at the moment, that this kind of deal has been promoted very heavily via the internet and local press, it is the all singing, dancing deal of the century.

In yesteryear it would have sold out in a day. Today, well these guys have been mailing to their database for months, and now have to take out full page adverts in the local press.

It isn’t selling, as they thought it would like hot cakes.

The banks to make these deals work have to of course load up the price to a level that currently goes past where the general resale market is, or to a level where other better quality units are far more attractive.

People don’t take this 100% mortgage offer so seriously, it rightly has far more people very concerned and dubious about it, in fact for general resale market, this kind of pitch and offer works quite well.

Very few people feel comfortable buying something that looks like it is free, and so they should be.

[angie]

You’re right there Chris, these mortgage offers on often full price properties should be avoided like the plague. I’d rather negotiate a very big discount from the start than take one of those on.

I remember almost buying something similar near Alhaurin, a show-house villa on a gated community, from the agent which sounds like a UK wine Co.

The site is unfinished, the German/Scandinavian developer went bust, it looks awful now, and the people (Brits) who did buy that villa admit they are stuck now maybe for years to come.

San Jorge’s the place.

[Author]

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