Spanish Re-mortgage

Hey there.  I'm new to this kind of site so don't really know how to start but here goes.  

We have a villa that we bought as an investment 8 years ago.  As times are now tight and both of our jobs are suffering we need to release some equity in the house to pay the mortgage until it is sold (which in this climate may take some time!!).  Every spanish bank I get access to is in Spanish and UK sites insinuate that re-mortgage is not easy.  As we need to do this from the UK with a simple trip to Spain to "seal the deal" can anyone let me know if they have tried to do this before and how easy a process it is.  Any ideas would be welcome.

Many thanks.

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Hi and welcome to the forum!  The re-mortgage market in Spain is still in its infancy but we have a mortgage broker who posts regularly here called Smiley.  He is your best bet - I'm sure he will drop in at some point!

You don't say where you are but we are based in Torrevieja and are still selling - albeit slowly!  If you really want to sell at the moment you need to be willing to be really competitive on price as the buyers who are out there are looking for bargains.  

Best of luck 

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Hi Loulabelle31

Although re mortgaging can be straight forward, most lenders will shy away from a purpose release such as you mention in your post. Re mortgaging costs are high - 5%-6%  and interest rates for equity release are higher than the norm.   

Have you tried to contact your current lender to see if they are able to help?  Perhaps to have a period of Interest Only to keep the monthly repayments lower, or extend the term?

 

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Thanks to you both Sharon & Claire.  

Our Villa is at the cross roads of La Nucia and Altea.  We haven't even started the marketing process yet and I'm not really sure what to do on that front either!  It has been used as our holiday home and although the intention was always to live their eventually none of the children are keen to leave their friends now (two of them are now in their early teens).  It has served its purpose and we need to move on.  We are not in a desperate need to sell but now that the decision is made we need to get on with it. 

I agree with what you say Claire about keeping the price down and that is what we intend to do as there is plenty of equity in it now anyway.  

The bank we use at the moment do not seem to have the option of interest only mortgages which is why we thought of another lender and releasing some equity in the process still only having a 55% mortgage - would this make a difference Sharon?

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Hi Loulabelle,

A lot depends on the current value of your property, to determine the amount of equity you have in it.   Is the villa classed as 'urban' or 'rustic'?     it is much. much harder to obtain a re mortgage on a rustic property!  For an urban classed property there is a product that offers a cashback option to help with the closing costs and to take the full term on Interest Only basis. Of course as with all lenders it is down to your meeting their criteria.   you mention in your post that both your jobs are suffering;   Do you mean that your employment is not secure?

 

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Hi Loulabelle - the marketing process is really quite simple, although different to the UK.  

There are some companies who will put your property on their website for a fixed fee and no commission but I don't think they do much more than that.  I'm sure someone will correct me if I'm wrong! 

I have only recently started working here in Spain, but I think that most estate agents here are similar to my company in that they charge a fixed percentage + VAT which is only payable on the sale of your house.  You will need to have all your documentation - Escritura, ID, recent bills, and any documents relating to any changes you have made to the property - we always ask for them up front to avoid any delays later on, but I don't know if that is the norm.

Once you have posted a few more messages you will be able to use the Private Message facility so just PM me if you want to chat in more detail.

Good luck!

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Hi Sharon.  

The villa was surveyed last November and valued at 590,000 euros and the outstanding mortgage on the property is approx 180,000.  We would like to increase the mortgage to around 250,000.  I don't know if the property will have dropped in value now though!  

My job is okay - albeit a bit quite (I work in a solicitors office which is mainly conveyancing) but my partner has his own business and things are not great with that at the moment.  Its  still okay but just not making what it used to, although we have been spoiled in the past with how well things were going.  We still have sufficient income to sustain the house but who knows what the future will bring.

The property is on the outskirkts of a lovely urbanisation.

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Hi Loulabelle,

I will be happy to discuss further - privately - if you wish, to see if we can help. I think maybe any further info is not for public knowledge!

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