Taking on Developers' Mortgage

Have now been offered mortgage from developer through my lawyer.  Not enough information given from them so have went back and asked a lot of questions.  They are getting back to me next week.  Meanwhile maybe someone could give me a pointer as to what to check out/make sure of and that I've asked the right questions.

Any info would be appreciated.

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This is quite common and if you take over the mortgage the builder has on your property you will save cost

But it not always a good...but often it is...eg with Polaris World if you do this and use the bank as your Spanish bank you will get a better deal than those who do not

They should offer you commercial terms perhaps with some interest only period

The main problem as I see it, as at 2008 ,is that , before regulations got tight, some of the banks financed developments which did not have 100% permits, although they were expected to be granted

So you may be able for example to get a ' builders mortgage' even though there is no Habitation Certificate .....the bank is taking you as the security and not the builder so the finer points do not matter too much......banks are in business to make money!

You may well get the HC

But no one should complete a purchase without a HC.....and all the other permits required

One way of making sure that you have a legal purchase is to get a mortgage from an independant bank.....they will not lend unless everything is OK.....so a bit of an indirect guarantee   

The good thing about buying in Spain in 2008 [ besides the fact that you will get a good deal!!] is that . provided you are sensible, you can be assured that it will be a legal build....the Spanish Government is making sure that the ' cowboys days are over'

 

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Interesting comment about the cowboys days are over Brian. While in general terms i would agree there are still areas where one needs to tread with great care. Agreed most independent lenders will not lend  on fully licensed developments and those that will do, require certain procedures to have been followed so that they know that eventually the mssing pieces of the puzzle will definitely be there in the not too distant future.

As you say most developers banks will subrogate the existing mortgage without paying too much attention to whether the Licences are all up to speed. I guess it begs the question when is a risk not a risk - answers on the back of a postage stamp please?

The problem with so many developer bank deals is that they are largely inflexible and the most common complaint is that they are not exactly clear about terms and conditions and so much is left unexplained - not to mention its all in Spanish surprisingly enough.

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