spanish mortgages

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15 Apr 2016 18:59 by Bevgt Star rating. 20 posts Send private message

We have been looking at property in spain and have now decided to apply for a mortgage,they have told us to submit documents and paper work and in 25 days they will tell us if we can have one, does anyone know how long this offer is valid for and if we have to pay anything for this, we know an amount we want its just a case of finding the property.


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15 Apr 2016 20:07 by juansheetisplenty Star rating in Cartagena. 256 posts Send private message

juansheetisplenty´s avatar

25 days is usually 6 months. Good luck! If you find an existing property with a mortgage you can subrogate this (take it on).  Otherwise it is a slow process because the banks have so many bad loans still on their books. Have you been asked for a deposit yet? Make sure it is refundable. Their should be no cost in making the application.

Saludos





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15 Apr 2016 20:23 by Bevgt Star rating. 20 posts Send private message

oh dear thanks, have seen a property and would like to make an offer but untill mortgage is in place we will have to keep fingers crossed ,we didnot think we would see one so quick so should have applied ages ago.





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16 Apr 2016 18:59 by Janbo25 Star rating. 6 posts Send private message

We're in a similar position, but have decided to use a mortgage broker as i believe its a little quicker and also checks that its the right product for you as i know so many people who have been stung with high insurance charges which are a requirement of the mortgage.





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17 Apr 2016 00:43 by Bevgt Star rating. 20 posts Send private message

yes it is a bit of a mine field we are applying with Sabadell and have made it clear its a decision in principle only at the moment so will see what they offer, but cant seem to find anywhere on internet that says how long the offer lasts for, as we will not be going back to Spain until september to look again,if the one we like does not except our offer once we have a mortgage offer.                                                                                                                                                             Are mortgage brokers very expensive or do you only pay if you except one of their offers.





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17 Apr 2016 07:54 by Janbo25 Star rating. 6 posts Send private message

we are finding them to be very helpful and useful. They prepared a full illustration for based on the info we have given them along with how much we could borrow and a recommendation of which lender is best given our requirements, ie the ability to overpay etc. This has all been done free of charge. Once they submit paperwork you commit to €500 and you usually get decision much quicker, this offer then remains available to you for at least 12 months I believe and if you accept the offer and proceed with purchase then their fees are an additional €1000 which are added to final fees once sale has completed and paid for by the lawyer etc.





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17 Apr 2016 08:53 by Jarvi Star rating in Halifax UK and Sucin.... 691 posts Send private message

Be very very careful.

When we took out our Mortgage in 2008 they made us take Mortgage protection insurance. (On a 20 year Mortgage). It started at 60 euros a month, within 6 years it was 90 euros a month. I challenged the increases every year, saying that as each year passed the amount owed to them was less, their answer was "yes, but each year you are older". At the end of the 20 years we estimate that we would have paid around 15 thousand euros extra. The only way out of this was to either die or pay the Mortgage off, fortunately we were in a position to do the latter.





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17 Apr 2016 10:01 by inspectahomespain Star rating in Orihuela Costa, Spai.... 2417 posts Send private message

Vip Supporter

There are quite a few things to watch for when getting a mortgage but the banks are lending again so the process should be much quicker but the terms can vary by bank and where you are in the country

If you are in Spain it is often easier just to visit the banks and discuss their terms, they now want mortgage business, especially Sabadel & Santander

The offers are normally valid for 30 days but they start with the status check and then they have to look at the property, do a valuation which of course they charge for

The rates can vary depending on what you take as what I would call the extras, insurance etc as most banks will insist that you take, as part of the mortgage, life, buildings and contents insurance, at of course higher prices than the market and they will refuse the mortgage if you don't take these, even write into the contract how many years you must use their insurance

Legally you can, after the first year, change the insurance as with the UK an all you have to do is have life cover where the primary benefit is to the bank, Jarvi it is worth checking this in your case because that is a fortune

Few other things to watch, some banks insist on full term insurance, that you buy in advance the insurances and they add the cost to the mortgage, for example 20 years of life cover at €100 a month

Also check for any penalties for early settlement

 



_______________________
Roy Howitt Independent Property Consultant www.sonrisaproperties.com www.snaggingspain.com WE CAN FIND YOUR DREAM HOME 627 955 748



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17 Apr 2016 13:25 by Bevgt Star rating. 20 posts Send private message

We are looking in Mallorca so i suppose all the rules are the same as the mainland , they went through how much deposit etc monthly payments never mentioned insurance , and gave us the forms to fill in and send back asap so we can put an offer in on the property we like, if we agree with the mortgage.

If the offer is only for 30 days wouldnt be any good for us as if we loose this property will not be returning to look again until late september , so would be in the same position again.

janbo25 please let us know how you get on and we will likewise





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17 Apr 2016 13:30 by Jarvi Star rating in Halifax UK and Sucin.... 691 posts Send private message

I did check. The bank were adamant that as I had signed a contract and in that contract the condition was that I must have their life insurance for the term of the mortgage. Obviously this is so they can make loads of extra money on top the  Mortgage payments. Unfortunately this practice was deemed to be unfair in the Uk years ago, but in Spain it is still allowed. Luckily we were in a position to pay the mortgage off 12  years early. Even after I had paid it off they got an extra month out of me as I could not cancel the insurance as long as I had the mortgage. (1 months notice had to be given to cancel)





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17 Apr 2016 13:45 by newworld Star rating. 896 posts Send private message

A few months ago i was looking at a bank property that was quite cheap, and Sabadell was trying to get me to take a mortgage out with them, They wanted me to have there buildings and contents plus life cover, then fees for setting up the mortgage, all these ad ons would have been loan over the years, And i never wanted the mortgage off them in the firtst place.
 





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17 Apr 2016 17:29 by Bevgt Star rating. 20 posts Send private message

We also went to Bankia  who did a personalization mortgage print out for us and no where is insurances, i will email them tomorrow to ask , the cost just seems to be going up , we were hoping the process would be quick and easy lol.





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17 Apr 2016 21:30 by honeywater Star rating. 65 posts Send private message

Make sure the interest rate is linked to the Euribor, not the cajas index, which will be at least 1.5% higher. I got stuck with this rate with Sabadell 11 years ago and am knwo suffering the consequences. A good broker should be able to give good advice on this or just insist that you want it linked to Euribor (i.e. Euribor plus 1% or whatever is on offer).





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19 Apr 2016 16:48 by mariadecastro Star rating in Algeciras (Cadiz). 9205 posts Send private message

Legal Questions? Speak to Maria Direct

Binding offer can never have a life inferior to 10 days



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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22 Apr 2016 19:25 by hugh_man Star rating in Kent/Roda . 1559 posts Send private message

hugh_man´s avatar

Warning. Banks and Mortgage Scams?

POSTED BY MYRA AZZOPARDI SWAINSON / INFORMATION TOPICLATEST NEWSNEWS ARTICLES

'Scam’ definition: a dishonest scheme.

I am presuming that most mortgage holders are aware of the abusive clausula suelo, (floor clause) where over forty Spanish banks added a clause into their mortgage contracts stipulating that; interest rates would not fall to below a certain percentage instead of following the euribor plus interest. This clause was eventually deemed as abusive by the courts in Spain only after the European courts ruled against this malpractice. This we suppose should have meant that all mortgage holders who had this clause in their contracts, would have the clause removed and the overpayments made over many years due to the clause returned. This was not to be the case with the banks holding fast. One bank alone that by doing the right thing by the consumer, would have lost over 33.000.000 euros a month. The banks who are reluctant to lose such gains is the reason why so many homeowners are still trying to remove the clause and regain their monies. Furthermore the courts in Spain ruled that the banks would only return monies to the clients from May 2013.

Even with the furore, some banks continued to add this clause to new mortgage contracts and may still be doing so today. The banks would presume that at the notary where the signing of the purchase deeds took place, that as long as the 'notario' read the full contract to clients including the indecipherable clause, would be legal grounds to say that clients knew what they were signing resulting in the loss of the option to later make a claim against the bank. Most purchasers were not aware of what they were signing. The courts are not accepting this reasoning.

Though the courts have been inundated with claims over the latter years, the banks still did not remove the clause. Homeowners started to question their banks where the directors would either ignore their pleas or continue to justify the existence of the clause. The banks refusal to act is likely based on the premise that out of twenty clients who complain, only one would take legal action. Banks acted on the one case and made savings by not paying out the claims nor removing the clause of the other nineteen.

The courts have sentenced numerous banks to pay back millions to claimants and remove the clause. The same banks are now losing a lucrative profit on a monthly basis. It appears not happy with this situation, a certain bank is now contacting their clients and offering to remove the clause if the clients would sign for a fixed rate mortgage payments and, sign away their rights to make claims for repayments of the excess paid. We have written proof of the offers been made by a particular bank. With the euribor at zero, the bank is offering a fixed rate at, wait for it; 2.150% when in reality the euribor rate for May 2016 will be on average; 0.002%. The bank has provided their clients with a forecast of the euribor for the next twelve months. The banks chart conveniently shows the euribor for May at 2%.

If the banks approach those with a mortgage loan with an offer and asking that agreements are signed. It would be best to take the offer away and study it. If not understood, approach a professional.

Why should the banks have carte blanche to act in this way? The courts in Spain have ruled in many cases won that the clausula suelo is abusive, should be removed, and that the bank should return the excesses paid at least from May 2013. This again is a slap in the face when the The European commission have stated that the payments should be retroactive with most having paid in excess in their monthly repayments for many years. We are now waiting to see if the European Court of Justice will rule on the side of the consumers allowing them to reclaim since the initiation of the mortgage contract.

Due to the banks underhand actions, Thousands have had their homes repossessed (not being able to meet the excessively high monthly repayments induced by the clause) by the very banks who added the clauses in the first place. To add the icing on to the top of the banker’s cake, the banks are in many cases, allegedly taking back these properties debts free and then in many cases sold on to what is known as the 'Fondos Buitrez' (vulture funds.

To all who may be affected by this abusive clause can contact me for further information. For those about to sign mortgage contracts, be aware and use a lawyer. Take into consideration when borrowing that the interest rates are low which will bring the buyers back to the market but consider when borrowing at attractive offers, what clauses or rates will reappear in the future.

Important Update 22/04/16

I have been advised by the lawyers with expertise in this field that, even if a letter of agreement has been signed by the bank for the fixed rate and or giving up your right to claim, this would more than likely be considered to be null and void by the courts.

myra@citizensadvice.org.es

Tagged With: #bankmortgagescam#FundCABSpainclausula suelofloor clausewarning banks and mortgage scams





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22 Apr 2016 21:26 by rod Star rating in Uk and Spain. 469 posts Send private message

Hugh I personally got my bank to remove the floor rate clause on my mortgage. I did not pursue it to be backdated currently but may review this in near future with my Lawyers. I would need to engage their services to argue this matter further on my behalf as it took twelve months to get it removed.

I would happily fix my interest rate at 2 and a bit for the term most would I expect but as you say they would weasel out of that as soon as it dosent suit.

The banks are ruthless ,untrustworty nothing more than loan sharks. 

Good luck with your quest and If one just one person decides no I wont be ripped off from reading your efforts then all the good.

Rod

 





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23 Apr 2016 10:29 by Bevgt Star rating. 20 posts Send private message

On the Sabadell application form for a mortgage it does say home insurance 20.09 € a month amount to be revised annually , it also gives you the option to say yes or no to home and life insurance and indicate why.Which all sounds fair at the moment i hope.

 





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25 Apr 2016 18:19 by Smiley Star rating in San Pedro de Alcanta.... 2502 posts Send private message

Smiley´s avatar

Sabadell are likely to add a premium rate to payable interest for every element such as home or life insurance that you decline. If they can't get you one way they will certainly try to get you another.

Sabadell are also the prime culprit for applying single premium life cover that inspectahomespain referred to in an earlier post - I am aware of people not knowing anything about it until arriving at Notary to complete on a purchase to have the form for signature thrust under their nose. It is akin to the product that Gladstone Brooks (etc) advertise about on TV - underwritten by Zurich insurance and pays them in the region of 60-70% of premium in commission.

Not aware of any lender still applying the old IRPH method of interest charging and think they have all switched to EURIBOR +. Be careful with fixed rates as early redemption penalties are much higher - between 2 and 3% against 0.25-0.5% with a variable rate. 



_______________________

Smiley - patrick@marbellamortgages.com  www.marbellamortgages.com   www.comparetravelcash.co.uk




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25 May 2016 18:30 by Bevgt Star rating. 20 posts Send private message

Sabadell have just told us to find a property first then apply for the mortgage ,as i understood you should get a mortgage offer first otherwise you could loose the property that you want and  your .deposit.





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25 May 2016 19:53 by Smiley Star rating in San Pedro de Alcanta.... 2502 posts Send private message

Smiley´s avatar

Thats Sabadell for you.....although many banks now require a copy of a Nota Simple for a property to approve owing to the number of people asking for mortgages who then fail to go forward on a transaction. For all of our clients we do a study of their economic information provide a quote that is subject to supporting documentation - which is the closest you will get to an AIP in Spain. If there is a grey area we will collect and package the documents and submit to lender/s for a verbal agreement and proposed terms.  

Furthermore we recommend to all clients that any deposits paid (even a simple 3000 Euro reservation fee) is paid only via their lawyer (ideally held in lawyers escrow) with a binding agreement that the deposit is paid subject to valuation and mortgage offer. A mortgage offer can be affected significantly by a valuation (subject to the type of property), especially in the case of rustic properties as bank valuations rarely meet the valuation of sale by vendor as they are deemed high risk by the banks. Some banks won't even lend on them at all. Thus if you have taken the correct precautions any monies paid should be secure. 



_______________________

Smiley - patrick@marbellamortgages.com  www.marbellamortgages.com   www.comparetravelcash.co.uk




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