Mortgage Types: BTL or Normal?

This topic has 8 replies, 5 voices, and was last updated 9 years, 7 months ago by Anonymous.

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- October 23, 2013 at 6:05 am #57832
  
  Anonymous
  Participant
  
  Hi all!
  
  I would like some advice about mortgage applications. I am currently living and working in Spain. So I have an NIE and I’m living in rental accommodation. But I’m considering buying a property to rent out. Would I need to specifically apply for a BTL mortgage or could I just apply for a normal mortgage? Would there be a difference is their willingness to lend and the amount they would be willing to lend?
  
  Thanks in advance!
- October 23, 2013 at 10:19 pm #118537
  
  Anonymous
  Participant
  
  oh, the banks will be be shaking with glee to lend to you 😆 😆 😆 !! the sky is your limit 😉 😉 😉 !!!!!
- October 24, 2013 at 1:30 pm #118547
  
  katy
  Blocked
  
  Buy to let mortgages…it’s not the UK you know
- October 24, 2013 at 8:09 pm #118550
  
  Anonymous
  Participant
  
  Mmm thanks for the considered responses. Very helpful. I know this is not the UK. But is there any reason they wouldn’t have BTL mortgages here? I’m clearly asking questions because I don’t know…
- October 25, 2013 at 8:11 am #118552
  
  Anonymous
  Participant
  
  Curious,
  
  For the time being, Spanish banks don’t want to lend, and certainly not on the strength of expected rental income.
  
  To get a mortgage in Spain today your own funds have to cover at least 50pc of the total cost of the purchase, and your debt ratio has to be around 30pc. You might be able to do better than that if you buy a bank repo.
  
  Banks will not consider expected rental income in the mortgage assessment, so BTL mortgages don’t exist.
  
  Mark
- October 27, 2013 at 5:43 pm #118551
  
  Chopera
  Participant
  
  @curioustoknow wrote:
  
  Hi all!
  
  I would like some advice about mortgage applications. I am currently living and working in Spain. So I have an NIE and I’m living in rental accommodation. But I’m considering buying a property to rent out. Would I need to specifically apply for a BTL mortgage or could I just apply for a normal mortgage? Would there be a difference is their willingness to lend and the amount they would be willing to lend?
  
  Thanks in advance!
  
  As mentioned, BTL mortgages (i.e. based on rental income rather than your income) don’t exist in Spain, but on the other hand the banks don’t seem to have a problem with people renting out property that has a “residential” mortgage. In my experience some banks will still finance their properties up to 100% provided your total mortgage payments remain below 40% of your income, but this is unusual. Usually they want you to put down 40%.
- October 27, 2013 at 5:45 pm #118562
  
  Chopera
  Participant
  
  @katy wrote:
  
  Buy to let mortgages…it’s not the UK you know
  
  That might be why they asked the question 🙄
- October 27, 2013 at 10:21 pm #118564
  
  Anonymous
  Participant
  
  Quote:
  
  but on the other hand the banks don’t seem to have a problem with people renting out property that has a “residential” mortgage 😆 😆 😆 😆 😆
  
  ¿really? I’d ask if i were you!! 🙄 🙄 also, ask the insurance co?? don’t be an ostrich in Spain, rules apply here as well 🙄 🙄 🙄 🙄
- October 28, 2013 at 8:40 pm #118578
  
  Anonymous
  Participant
  
  OK, many thanks for getting back to me.
  
  Regarding the willingness of the banks to lend, I was under the impression that as you say, they are not keen and would demand a large deposit. But in one informal and another more formal conversation, the mortgage person at Sabadell never gave me any impression there would be a problem lending me up to 80%. Sure he did steer me towards buying a Solvia property and urged patience rather than rushing into anything. But I can’t see why they would suggest it won’t be a problem now, if in fact it will be when I do find a property.
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