Spanish mortgage offer - valuations?

Hi there

We are waiting for spanish mortgage offers from our IFA as we had one offer to take over the builders mortgage - subrogation mortgage, but cannot accept this because the fees are astronomical (approx 5500 euros) and ontop of that they are not offering the 70% loan to value that we thought they were going to offer.

can anyone confirm if it is usual for spanish banks to offer 70%, or not? we thought it was normal.

also, do we need to get a new valuation since we put the deposit down 3 years ago, and the property market has decreased in value by some 40%, so would we now be able to get a mortgage based on the builders original valuation? does anyone know how to go about getting a new valuation?

also, if the mortgage companies say no, does this give us power to bargain on the price based on the current market?

please advise,

thanks

Jo

Hi Jo

There is nothing "normal" in the current market. I think 60% loan to valuation is easily available, but beyond that it is a bit of a lottery. When we applied we were told by the Halifax Bank that an amount of up to 75% loan to purchase was available, with a ceiling of 60% of loan to value. In the end we were only offered 60% of purchase price, which was well below 60% of valuation price. I have heard from another independent source that the Halifax have been rejecting all the 75% LTP applications.

Whoever you use for a mortgage will probably insist upon their own "independent" valuation, which you will be charged for.

Negotiating on price is an interesting one, and may depend upon the builders and their confidence of moving on the property if you pull out. Perhaps somebody else can advise on this, however I keep reading about people walking away and handing back the keys as the most economic option. Hope not for you.

Dave 

H Jo,

There are still a handful of lenders offering 70% (lower of loan to purchase price or LTV) and some include Interest Only, if that is a requirement.    When applying for an independant mortgage all lenders will require a valuation on the property, using a company on their panel of valuers.   It is interesting that you say the fees are high if you subrogate the developers mortgage, normally there are some savings (i.e. mortgage costs) by going this route - were these made up of insurance costs etc?

Hi Jo & Dave

Like yourselves the fees that we have been given for a subrogation mortgage are almost 5,000 euros.  Thats for stamp duty, notary fees. registry and management fees plus another fee for the bank of just under 1,000 euros.  I beleive that these fees are payable twice apart from the bank fee if you do not take a subrogation mortgage.  I don,t know if they are payable twice if you fund the purchase from the U.K.  Maybe somebody else can answer that for you.