refused mortgage

hi,

we were due to complete on our property this summer,we have provided all info to capital financial planning who have just informed us that due to more than 40% of our income going on british mortgages,that we can't get a mortgage in spain,obviously we are devastated.

when we bought 3 years ago we paid 30% deposit through mri and were told there would be no problem getting mortgages in spain,cfp explained that due to the credit crunch the banks have tightened their lending criteria,where do we stand with our deposit ,have we lost this ?can the builder force us to complete even though we can't get a mortgage?we've heard some builders are preparing to take legal action against non-completers and pursue people in spain and in the uk,can this be true?

any advice is very welcome at this worrying time

Hi bailey2,

Really sorry to hear of your plight and of course I am sure this has come as a blow to you.  Purely from the mortgage point of view it could be that all is not lost - is it that CFP has limited resources by way of mortgage options?  It is true that lenders have tightened their criteria but they are readily approving mortgages; Different lenders have different methods for calculating affordability and there may be a lender that can help you.       If you do have several mortgages in the UK, are they rented out and the rentals are self funding? Do you have a buy to let portfolio that perhaps the lender / lenders that CFP approached have shyed away from?    I think it would definately be worth exploring your options more to see if there is a mortgage solution for you.  

There is a way out:

 http://www.eyeonspain.com/blogs/costaluz/144/no-financiation--resolution.aspx

http://www.eyeonspain.com/blogs/costaluz/482/credit-crunch-times-can-play-in-favour-of-consumers-why-not.aspx

You can cancel your contract on that ground but.. you need to act quickly.

Best,

Maria

hi maria,

thanks for your reply,

habitation certificate has now been issued,asked to complete by end of june,mortgage process has been ongoing for last two months with us being told outcome last week,are we too late to cancel the contract and ask for our deposit back?

regards

 No, you are not.

Maria

As Sharon says, if you have buy to lets in the UK and they can be substantiated as self funding (documented with tax return, rental agreement and evidence of rental payment) or better then there are lenders that will park those liabilities to one side when assessing ability to pay. There are also lenders that have a more flexible debt to income ratio than others. While I am unable to comment specifically on the lenders CFP use there are those people professing to be mortgage brokers that do not have access to or choose not to use every lender. I am sure that Sharon would agree that she has had clients that have been told by other "brokers" it is impossible for them to get a mortgage only to find that lo and behold there are options for them. 

Hi Smiley,  yes too true and could not agree more!  Also sadly the opposite too.  What I don't understand - and what I hear a lot of - is  why "brokers'' take months, yes months to try and get a mortgage for someone to no avail!  One case springs to mind where the client had been through 3 brokers already and their case really was not that complicated!