80% Mortgage possible ?

Hi Everone

Good day

My friends Son wants an 80% mortgage is that possible nowdays ? he has a very good credit rating plus good job in the UK

He feels in the long run Spain may offer more then the UK ( plus his Dad lives in Spain )

any pointers for him would be welcome , I can give more details if required (PM )

Regards

Cristina 

The banks are being really stingy about granting mortgages nowadays.  But if your son can find a property he likes from the stock of repossessed properties that the banks have at the moment it´s a different story.  In some cases they will grant a 100% mortgage!

The main banks have websites listing the properties for sale.

Sometimes the bank will ask for a guarantor.  Try to avoid being a guarantor at all costs.  A lot of people imagine that the guarantor is the last response if payments fall behind, but here the guarantor is the first response!  The banks go after the secure and easiest method of obtaining money owed, be it for a house or car etc.  They don´t waste time chasing the non-payer, instead they quickly go after the guarantor - and they will enforce the conditions, even if it means leaving a grandmother homeless in the streets as has happened in the past.  Even if the grandmother said she really didn´t understand the implications of being a guarantor etc.

The banks have no mercy!

Hi, if you are a non resident I think the banks would only lend to 75%?

Justin, is that 95 - 100% for non resident as well?

As everyone knows Polaris World have discounted units with 100% mortgages subject to status-so come and have a look and I'm sure that a good deal can be done 

Also CAM Bank but in general circa 80%

Now you have to take a view on the future but history tells us that prices will recover 

So if you want to buy come over and have a look- if your status is good a mortgage wll not be a problem on above mentioned units

Just my interpretation, but worth thinking about:

If you ask a bank to lend you money on a property they do not already own they will be very risk averse. They will probably give you an 80% mortgage, but not on favourable terms. They will be worried that prices may fall and you will default.

If you want to buy a property that they own, that is currently empty, and they are not getting any mortgage payments for, then their attitude will be totally different. They really want you to pay the mortgage on it, therefore they will basically ignore all the usual concerns and alloww you to have a high risk mortgage. At least they have moved on an overvalued property and are receiving monthly payments against it.

Anybody have a different view on this?

Dave 

Hi Cristina,

The maximum a bank in Spain will lend to a non resident is 70%, against the lower of purchase price or valuation. However when buying a discounted / repossessed property (either direct from a bank or via an agent) higher percentages are offered.

A realistic interpretation and the banks are taking a comercial approach to selling the vacant propertiers they own

This gives buyers a good opportunity to find a great deal...not all of them are good deals and you have to look for them

In the end when buying a holiday or retirement home it comes dowm to comparing what you can get for your money in different locations, deciding where you want to be and the life style you want, then do the best deal you can and get on wth your life

Buying in Spain is very competitive in all respects compared with say France, Portugal etc

And in all countries you have to make sure that you get good legal advice and approach the purchase is the same way as you would in UK-do that and nowadays everything will be OK

Also if the land is in any way classified as rustic then he will really struggle to find a bank to lend and certainly not at more than 50%.

Here's a real funny one. Halifax bank are asking that the same amount as the mortgage be placed on deposit with the bank for the duration of the mortgage. That means they want the property as security and the deposit account. Halifax believe this to be a very good deal and emphasise they will pay a good return on the deposit account!!!!

Goldie, yes, for non residents, and fultond, actually many of the mortgages have been hugely competitive with some of the banks.

These "bank" deals are making life very difficult for the agents at the moment as banks seem to be prioritising shifting their own stocks.

Justin

And for us brokers too Justin!  I guess it's swings and roundabouts - if you can get a good deal on a bank property, a high percentage mortgage (and this is normally based on total price, inclusive of IVA) might be preferable to a not so good deal on the rate.   I know one lender is offering a first year rate of 3.75% then the remainder on euribor + 1.5 - not so great as there are better product rates around for an independent mortgage, but you are restricted to 60% -70% of basic purchase price.