Veranda Al-Andalus - Keymare

Hi
My partner and I bought off plan in March last year but with the credit crunch we are finding it impossible to get an 80% mortgage. Our apartment will be complete in June next month. We are thinking we will loose our 20% deposite. On the internet they are now selling apartments for less  - 30 to 35k euro.
Has anyone got any info for us. Is there anyone in this situation. Did you get an 80% mortgage. We bought through MRI - what are your experiences with MRI.

Thanks for reading
Geri

Hi Gerda, 
                           sorry I can't help but I wish you good luck. As you will have seen on this forum many people have had similar problems and I am sure you will get some good advice.

Hi Geri, I do sympathise &, as Acapulco said, there are many stories of members who are in the same boat. 

I'm tempted to say I can't help but wonder why people decide to buy in Spain if they haven't thought too much about how they'll cope if the exchange rate changes as it unfortunately has. 

Whyever didn't you arrange to forward buy euros from a currency bank ? You should've set a rate to protect yourselves. 

We didn't need a mortgage so I don't know how it works. Do you leave arranging a mortgage till just before you complete ? Please explain it to me why you are now in the position you are in. In the UK you arrange a mortgage before agreeing to buy. At least that's what we did & it seems sensible. Isn't that the way it works in Spain ?

SMILEY, an EOS member who's a mortgage broker on the CDS,  could advise you. Worth a try. I'll ask him to pop in & see thread. You cannot use your PM system till it's activated so add you name to the thread Justin, help required please regarding PMs to new members..

Join your owners forum, I believe it's here http://www.eyeonspain.com/ViewDevNo.aspx?dev=A199

Good luck.


This message was last edited by morerosado on 5/26/2008.

Dear Gery:

Have developers meet all the commiments according to contract? Have you exposed that situation to them and try to negotiate a discount  or any other  credit terms for the payment?

Best regards,

Maria

Hi Geri it is still possible to get an 80% mortgage however it should be noted that many lenders are withdrawing the facility owing to credit crunch and also many of the apartments in this area are coming in at valuations less than the actual purchase price which has an effect on the mortgage available. There are many people that have walked away from their deposit and are having discussions with lawyers about who is culpable and whether there is any recourse against the agent that sold to them.

Thanks for answering Smiley & Maria. (Knew you would )

Hi Geri
Probably a stupid question but just a thought. If you are having a repayment mortgage have you looked into an interest only option for a short term? Or maybe if you have a repayment mortgage on your current home maybe you could look into options on that. It's just a thought and I'm sure you've already looked into different options but one of my friends has just taken a similar option for a short period so I thought I would make the suggestion. Hope all works out for you.

Flossy mate, where've you been hiding ? Welcome back.

Thanks for the info Candyfloss but I'm on an interest only mortgage.

Geri

Thanks Smiley
I will email marbella mortgages with our details.

Geri

Thanks Acapulco

Geri

I think Candy Floss possibly means an 80% interest only mortgage in Spain. Seems to be a bit of cross purpose as the way that I read her post was that she had interpreted your post as if you were perhaps going to struggle to meet monthly payments hence take interest only here in Spain or if not achievable then switch UK mortgage to interest only ( I am a man so interpretation of the female mindset is not top of my list of abilities - if i have misinterpreted Candyfloss then apologies).

If i revert to the original reply it is possible to get 80% of value (up to 90% of purchase contract price and possibly 100% if the situation is right) with interest only but it is constrained by the valuation and where you are buying that will be critical, as valuations are below what might have been expected with some valuation companies returning figures less than purchase contract price. Without further more specific information it is impossible to go into any detail.

Thanks Morerosado
As for foward buy euros - we didn't know anything about that and MRI (who we bought through) certainly did not give us that information.
MRI said it is pointless getting the mortgage until it is completed, their words were ''why pay for it now''. But when we popped over in April another broker said that we couldn't have got a mortgage last year as the property was not built and we had only paid 20% deposite.
So lots of people with lots of different information.

Geri

The other broker was 100% correct - you cannot get a mortgage on a property that is not completed and licensed. However what you could have done was secure an agreement in principle subject to property valuation. It would have been subject to updated financial documents approaching completion but could have been done nevertheless. However considering timing and what has happened with global credit crunch a great many lenders have moved the goalposts so subject to where the AIP was agreed you could well have found yourself having to switch lender anyway. We have had to do that for a great many clients - especially with Halifax taking the stance they will only advance to 60% of purchase price or valuation whichever is the lower - someone of a more cynical nature than I might think they didnt want to lend in Spain any more (or for the time being anyway) so thank the Lord am I not a cynic!!!!!!!

Hi Smiley
Thanks for all replies
We bought off plan in Veranda Al-Andalus in March '07 and to be completed in September '08 for 206,500euros and paid 20% deposite.
We have looked on the internet and the price seems to have dropped by 30 to 35k.
We bought through MRI which we don't believe this was a good thing as they also led us to believe that our taxes could be included with our mortgage but now we don't know.
I have just emailed marbella mortgages with my contact details.

Geri

Geri, aren't you glad I screamed for "SMILEY" ?

Morerosado
Yes your are FABULOUS

Thanks a million
Geri

Sorry Geri
If I had a brain I'd be dangerous  .
I was just thinking that if you were perhaps finding it difficult to obtain an 80% mortgage on the property then maybe a remortage on your current property to enable you to have a less percentage on the Spanish one might have been a short term solution as it is happening here in the UK and have heard lots of different stories of what people are doing with options on mortgages while riding the storm.
Smiley, you're right, you will never understand the workings of the female mind so stop trying  

Not to worry Candyfloss we'll get their in the end.
I'm Interest only in the UK with not much available funds to spare (current market)as I already dipped to have a huge face lift on my flat- worth it in the end but could now do with the extra cash

Geri

Hi Geri

I'm afraid you have to take everything told to you by your agent with a pinch of salt. These are te same stories that were told to us and there are others on the forum too. The "get a mortgage at loan to value not purchase price so you can include your IVA and costs" was the biggest economy they made with the truth. If you look back there is a thread somewhere about our purchase going pear shaped because back in October last year valuations were coming in lower than the purchase price!! Is the builder's mortgage not an option? Another member here took the builder's mortgage on her purchase at Thalassa and it saved quite a lot of money.

Mark

CandyF that is most definitely a bridge too far - something i have never endeavoured to try and fathom is the workings of the female mind - beyond the age of about 11 they seem to become from a completely different planet - Venus perhaps?

Hi Marksfish
I've been scouting the messages looking for the Thallassa lady but I can't seem to find her.
Have you any idea

Ta very much
Geri

I believe Noreen is currently in Spain. Her user name is nfm2862 if you want to drop her a PM.

Mark

Hi Geri, we are also buying on veranda and wondering what the situation is too. I have allready been in contact with my solicitor who says that there is no price drop and that KM have confirmed to him  that phase 2 will be going ahead at a higher price than phase 1????? There is a forum set up for Veranda buyers and a couple of people (including ourselves) have already expressed concerns. I have seen an estate agent advertise a 2bed 2bath at 'below market value'. We also bought through MRI. Have a look at veranda forum and  Thalassa forum for other stories. Lets know how you get on. Tricia
PS we have looked into the builders mortgage (as someone suggested) and it is over 20years so might not suit you. But if you have sent your details onto smiley he will be able to answer all your mortgage questions.


This message was last edited by tricia52 on 5/26/2008.

Hi Geri,

My partner Martin & I  bought offplan for a 3 bed apartment in Guardamar in September 06. We completed March this year. We had great difficulty getting a 80 per cent mortgage as the euro crunch hit us too. We went to several banks who had initially said no problem. One of them had us trawling into a internet cafe to get our credit details from equifax etc, before they would consider us even though our salaries shouldnt have been a problem.
Finally after alot of stress and thinking we may lose our deposit etc.... the developers liaised with another bank who we hadnt even considered and some strings were pulled and we finally got our mortgage and it went through really quickly.
We also edged our bets and took a 2 bedroomed property on the same site and as it was ground floor we had loads more outdoor area space....so all turned out well!!

We are now looking forward to our 3rd holiday in our lovely apartment in July..

Dont get too downhearted, things like this happen and at the time you think you are the only ones going thru it!

Hope this helps

Julia & Martin

Just to add one further thing regarding valuations. We had loads of problems with undervaluing our property from the time we bought off plan to completing. In 18 months 3 valuations (2 SPANISH BANKS AND 1 ENGLISH BANK VALUATION) all came UNDER valuation from what was quoted in September 06 NOT March 08!!...it appeared our property had lost money not gone up in value. This had a knock on effect with the 80 percent and our budget was knocked for six! Even if the pound had fallen against the euro we certainly didnt expect in 18 months our property to de-value. That is another reason why we opted for the cheaper 2 bedroom apartment. Luckily apart from the 3rd bedroom, the living area is the same square footage but we have the bonus of loads more outdoor room as i mentioned in my last post.

lordy lord!!

Julia

Hi Julia something you may not be aware of is that bank valuations here are not principally based on market forces but the principal line of the equation is cost per sq m to build. They will consider completed transactions recorded at the Land Registry but cost to build is more important than sale transactions. Added to that the Bank of Spain have issued a directive to the valuation companies to exercise extreme caution when assessing a property for valuation purposes before issuing their report and to decrease the published figure - various % have been talked about so nobody is exactly certain what the directive entails - as low as 3% to as high as 15%. basically they are trying to minimise the potential risk to mortgage lenders in the event of a serious decline in property values. Whether this is the right way to assess a property value or whether the BOS actions are correct or not I am not going to argue - but it is what it is. Thus even an upward price curve to the property market could have ended up with a valuation lower than purchase price if it did not meet price per sq m requirements.

Hi Juliad
I was wondering if you wouldn't mind sending me a PM on detoils on how you went about downsizing. Is this a new thing?
I bought on Veranda Al-Andalus through MRI.

Thanks
Geri