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Thursday, July 26, 2007
superdon
Apartamento
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Hi,
We are hoping that our new build apartment will be completed in Dec this year and for the purchase we require around 70% of the purchase to be paid for using a mortgage. So, we have started to investigate spanish mortgages now.
We want to get a mortgage in place as soon as possible, but understand that mortgage offers are only open for 3 months, which I guess is fair enough and similar to the UK.
The problem we see is concerning the valuation. Of course, a valuation needs to be done. But, as it is a new build we have been told the developer will not allow valuations until the apartments are totally completed. Which seems to be a problem to me.
For example, if we apply for a morgage in October, we get accepted on a 70% LTV mortgage. We then wait until December comes and the developer and agent say "right, all completed come and sign and pay". Its not until that point we can arrange a valuation and hope that the valuation is good enough for the 70% mortgage. What if they value lower? We will then be in a mega rush to get something else organised.
Am I correct in my assumptions, and can anyone see any way around this, other than 'hoping for the best' that the valuation all goes to plan?
It just seems, even though we are trying to plan well in advance, we are still going to be rushed around completion time.
Cheers.
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26 Jul 2007 4:36 PM
EOS Team
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I'm in Costa del Sol
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Yes, the valuation cannot be carried out until the property is finished. Catch 22 I suppose.
If you are worried then you need to speak to a good mortgage broker here as they will know which bank to use to make sure that the valuation comes as as you need.
That sounds a bit dodgy but it's not meant like that, it's that different banks use different valuers and they all come up with different figures.
Have you listened to the podcast on Spanish mortgages here? Click the "Justin meets..." link in the menu in the members area and listen to the interview I did with Patrick Robinson (AKA smiley on here).
You can also download a transcript of that interview if you want a hard copy at:
http://www.eyeonspain.com/ebooks/spanish-mortgages.aspx
Justin
This message was last edited by EOS Team on 7/26/2007.
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26 Jul 2007 4:58 PM
superdon
Apartamento
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Yep, am just organising a time to call and speak with Patrick.
Have to say, the mortgage side of things has been the most painful so far! Mind you, shouldnt speak too soon, there might be worse to come :)
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26 Jul 2007 6:24 PM
Karensun
Villa
I'm in Orihuela Costa
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Hi Superdon, we have been living in Spain for nearly 5 years now. We rented for a year whilst our apartment was built. When we came out to look with Parador ( and I know that name will cause an uproar on here!) and made our decision we were introduced to the manager at BBVA bank who imediately agreed our mortgage in principle. Now my hubby is an ex banker and we did not get anything in writing except for an estimate of repayments, so this was a bit wierd for him! We were told to contact the manager again when the apartment was almost completed ( by this time we had opened an account with them too ) and in due course, nearly a year later, we did this.
The apartment was nearly finished although it had no kitchen or bathroom fitments, but BBVA valued it and the mortgage was there when we needed it.
Smiley has all the knowledge on mortgages, but I just thought you may be interested in our experience. Good luck, anyway.
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26 Jul 2007 7:24 PM
saznaz
Ático
I'm in los altos and kent
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We r in exactly the same position as you with percentage needed and completion
To be honest I have been advised that the rough current rate is 5.5 so its not far off the uk
So I think we r going to add to our uk one
Saves the hassle of changing up money every month to put in your bank
Although higher repayments u will always b checking the exchange rate and being charged tranfer fees
I am so busy at work I am going to find it hard to keep track
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27 Jul 2007 12:18 AM
jules1
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I'm in St Ives, Cambridgeshire/Dream Hills, Costa Blanca
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Hi Superdon, I arranged my mortgage with Solbank, but my property was not ready until 17months later - the bank could not believe the delay, nor could I !!!!!!! However, there was no problem in them coming up with the goods. Obviously you have to pay the up to date Euribor rate (which in my case had risen) plus whatever % you have agreed with them.
Smiley seems to be a really good person to give advice, I had already committed myself so I heard about his skills too late!
Julia
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28 Jul 2007 3:41 PM
Smiley
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I'm in Nueva Andalucia
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Hi Superdon what I would suggest is getting an AIP (agreement in principle) based on income. Yes you are still in the lap of the gods on valuation but there are lenders who will advance up to 80% of valuation with terms that are not too injurious (rates from Euribor plus 0.75%) - there might be additional upfront cost in the form of a MIG premium although there are lenders who will not charge this at 80% of value. As long as one has plenty of time there is an appeals procedure that can be followed if a property does not value highly enough but I guess it depends on you and how long you want to allow to get things in place. Generally most lenders will require to see updated payslips and bank statements if the completion takes place a long time after the AIPis given.
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