Non resident mortgage advice required please

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03 Sep 2020 20:51 by htrj Star rating. 5 posts Send private message

Hi Everyone, 

Some years ago I sold my house in the Spain. It was a magical house to have, great location, very historic and in fact I still have dreams about being in it from time to time, but at the time I just couldnt justify keeping it with what I had going on in Britain too, so it was sold. 

Now things have calmed down a little for me here in the UK, ive got a few quid which I was going to spend on a property in Spain anyway, and now I see that my "old drum" is back up for sale...... 

The sadness is that I dont quite have enough for the required 30% of the purchase price but I suspect the bank will value it much higher than purchase price anyway. First time I bought it back in 2008 they valued it at 575k but i was only paying 350k and they did something similar when I sold it to the current vendor, so why wouldnt they value it high again? 

My question is, will I need 30% of the price I agree with the vendor (plus fees of course) or is it the case that the bank will lend me 70% of the amount that they value the property at, in which case I need to make some phone calls..... 

Also, im making the assumption that it is still the case that non residents require 30% deposits, and if Brexit comes into the mix, it might help that I possess an EU passport. 

Thanks for thinking about this with me and looking forward to hearing from you. 





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03 Sep 2020 22:22 by mariedav Star rating in Ciudad Quesada. 1062 posts Send private message

According to one website, the deposit for non-residents is 30% of the valuation or purchase price "whichever is the lower". 

Don't forget the transfer tax of 10% is not included in the purchase price so you'd have to find 30% of the, I assume, purchase price but another 13 to 15 percent on top for taxes and fees. 

You don't say how much is being asked for now but, if the 575k is still correct, you'd have to find 172,500 for the deposit plus another 80,000 ish for the fee so around 250k.

“The maximum mortgage for non-residents is 70% of the purchase price or valuation, usually depending on which is lower. In most cases, better terms are offered where the mortgage is less than 70%,”

I guess that's so the amount you borrow will not exceed 70% of the price you are actually paying. 

Of course, you'd be much better off asking the bank what they will lend you and what you need as a deposit rather than guesswork.

 

 


This message was last edited by mariedav on 03/09/2020.



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04 Sep 2020 04:23 by Kavanagh Star rating in Oil Drum Lane Newcas.... 930 posts Send private message

Kavanagh´s avatar

All you history with your beloved property is irrelevant. The bank will only lend subject to your status and it’s own current valuation policy of it’s loan to value.



_______________________
There is enough in the world for everyone, but not enough for the greedy!



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04 Sep 2020 08:22 by htrj Star rating. 5 posts Send private message

Thanks for the input, 

mariedav: im expecting to bring it in for e350000 including fees.

kavanagh: dont worry, I do realise that there is not a bank anywhere that lends on sentimental value. Not that that is influencing me either. The fact is I know the house, I know it works for me and I have also proved that it works as a business.... but if its not to be on this occassion, then its not to be. 

Hopefully my old bank manager is still around, ill take your advice and have a word with him. 





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05 Sep 2020 10:16 by Maceyg62 Star rating. 8 posts Send private message

What we purchased last year, the bank valuation was absolutely no where near the purchase price. I understand the banks will significantly undervalue properties to avoid being caught out like they were some years ago.





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05 Sep 2020 10:38 by windtalker Star rating. 1665 posts Send private message

If the property you are looking at is a bank repo ..then you shouldn't have any problems getting a mortgage from the bank that owns the property... especially if they are taking 30% of the agreed price as a deposit from you ...the bank has nothing to lose by giving you a mortgage.. basically if you fail to make the payments the bank they will repo the property ..you will lose your 30% upfront payment you made ... the bank will re advertise the property as a bank repo so it's a win win situation for the bank every time..I doubt it very much if you will find another bank other than the one that owns the property to lend you the kind of money you are looking at borrowing... especially the way the property market is in Spain at the moment.

 

 


 


 


This message was last edited by windtalker on 05/09/2020.



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05 Sep 2020 13:35 by htrj Star rating. 5 posts Send private message

No, its a private sale not a bank repo, but I do appreciate an awful lot has changed in the last ten years in Spain, and I have no idea what those changes are.





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06 Sep 2020 11:52 by windtalker Star rating. 1665 posts Send private message

Property prices have generally dropped by as much as 50% in some area's since 2008 especially the larger type propertys ..so forget your heart and think with your head ..the mortgage you are considering would be classed as substantial in today's terms in Spain..no one can say what the resale value of a property in Spain is especially on the Costa's as nothing is selling at the moment due to Covid 19 so if I was you I would  wait until they find a cure for the virus and then start looking but leave your heart in your suitcase and think with your head.

 


This message was last edited by windtalker on 06/09/2020.



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06 Sep 2020 15:02 by Kavanagh Star rating in Oil Drum Lane Newcas.... 930 posts Send private message

Kavanagh´s avatar

Windy, for once I fully agree with you. However professional estate agents are saying the property market is on fire right now and prices being achieved are much greater than pre 2008. Some are advertising they have waiting lists of buyers. Could they be exaggerating?



_______________________
There is enough in the world for everyone, but not enough for the greedy!



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08 Sep 2020 22:29 by mariadecastro Star rating in Algeciras (Cadiz). 9290 posts Send private message

Legal Questions? Speak to Maria Direct

70% is generally the most Banks lend to foreign buyers these days

M



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Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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