Improving Terms For Non Resident Spanish Mortgages

July 20th, 2010

Having almost removed themselves entirely from the non resident market by lowering loan to values to 50% and increasing rates two years ago one Spanish Bank has recently changed its product portfolio to attract new business.

By far the best of their new products is 5-year fix at 3.20%.

With current variable rates averaging around 2.5% to 2.75% but with Euribors now increasing slightly each month; and a market view that without doubt in the next 18 months the ECB base rate and Euribors will increase steadily; this would seem to be fantastic value for money over a 5 year period and a good low rate hedge against rate increases. After the fixed rate period the variable rate will be 0.49% above Euribor; with most banks currently charging between 1.25% to 2% above Euribor this a very low and unlikely to be beaten in the longer term.

The bank has also raised loan to values to 65% making it only one of two banks above 60%.

Interest only up to two years on a case-by-case basis can be made available although the banks strong preference is a repayment mortgage and it is more likely to be approved on a repayment basis.

Minimum valuation of property must be 170k and debt to income ratios cannot exceed 30% but for clients who qualify this market-leading product provides good value in an otherwise difficult market.

For further information contact us

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Spanish Mortgages For Expats

July 7th, 2010

Due to the ongoing economic climate worldwide buying a high quality value for money property in Spain has become more achievable than a few years ago.

Many Expats working places like the Middle East or Africa see Spain as an ideal half way house for vacations and a final place to settle when current contracts or early retirement beckons.

It is easy to see why many people who have lived for years as Expats find it difficult to accept when returning to Western Europe cold and pricey UK and look for a more amenable alternative to return to.

Spain with its great climate, beaches, fantastic countryside and a more laid back way of life with all the amenities and infrastructure expected from a civilized country provides an ideal base.

Not too far away from family back in UK but different enough to make the move from United Arab Emirates or Africa not quite as stark as being thrown back into the UK way of living.

Because many Expats have long-term financial plans in place; often whilst timing for finding and buying that ideal Spanish home is excellent they may require in the shorter term funding to bring purchase decisions forward. Because most of the countries Expats work in are tax-free often Expats find banks in Spain difficult to work with or obtain lending from as they cannot provide the normal standard documents required.

IMS have many years experience in handling this type of application, know all the banks that will provide loans to Expats and have all the up to date information required to ensure the best possible overall terms tailored to meet the clients objectives are explained and sourced.

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Low Rate Spanish Mortgages Changes Name

May 25th, 2010

Low rate Spanish mortgages offering currency mortgages and apparently bucking all the trends in Spain by completing on an enormous amount of mortgages in 2009 making them a very successful company have for some reason despite this success decided to completely change their name.

Last year they state they completed on 700 mortgages! This is an astonishing amount of business. If each loan was an average of 150k and they earned 0.50% from the lender “Dominion Credit” this would have brought in an income of € 750k . Not bad for a two-person business giving as a pro rata cost against income BP a run for its money.

If I had a company as successful as they have pertained to be the last thing I would do in current environment is completely change my name. It is a conundrum as usually only companies who have damaged their brand by poor service or failure feel the need to change their name.

The new website called “Ubiquitous Mortgages” is pretty much a rewrite of the old website however, the spot the ball competition at € 25 an entry no longer exists under the new brand.

The old saying if it seems to good to be true does not apparently apply or does it!!!!

See latest feedback on Low Rate Spanish Mortgages below .
The comments from Clive Ballard are posted below.

As you say, Dominion Credit and Finance website is new, The name was only registered Jan/Feb 2009. Low Rate Spanish Mortgages were advertising the Yen mortgages in Oct 2008. The DC&F website, like the LRSM website is not very professional for the nature of what it is supposed to sell, and the office in Singapore is not an office but only a phone answering service. Like yourself I could not find any references to Henry Braithwaite in the banking world. I phoned/e-mailed him on a number of occasions in March 2009 requesting information on agents, other than LRSM for these mortgages.
I got no responce to the messages left.
Since DC&F were not contactable, and had no website until Jan 2009, I wonder how LRSM were able to offer their mortgages in Oct 2008, and purchased the domain name in May 2008.

Low Rate Spanish Mortgages charge a non refundable, 500 € to apply for a Yen mortgage.
I applied for a mortgage from them in Jan 2009, when there office was in Valencier. Approximatly 6 weeks later when I chased the mortgage, they had apparently moved to Bilbao, though were working through a UK phone answering service. When they rang back, I was told the morgage was not granted, due to the financial situation, but if I liked to apply again in 3 months (and pay another 500€) the situation might have changed.
It seems to me that the only ones making money out of this, are “Low Rate Spanish Mortgages”, a 1/2 man run business who as well as running lotteries*, also run a dating site under their other company name of Marverose S.L
They also have interests in an Estate Agents (wherepropertysells.com), though I think this may now, have closed.
N.B. The original UK company named Dominion Credit and Finance went bust in the 1990′ies.

*IMS would like to state there is no evidence that Mark Foreman runs lotteries which would which under the gaming act would be a criminal offence. A lottery has very different regulations to a competition.
Brian McKenzie says:
January 25, 2010 at 12:17 pm

Hi.
Similar story as clive only this time they said the mortgage was not approved because the valuation was wrong,which made no sense as no valuation had been made on the property. This email stating the above information was sent to me only after repeated attempts to contact them and also they said that they had sent me an email stating this a month previous which was total rubbish. Further attempts to contact them to clarify this has been ignored. I am now quite sure after reading Clives letter that I have been well and truly scamed..
B.Mckenzie

G F Crudgington says:
February 22, 2010 at 4:46 pm

Like Bryan & Clive I have also had similar experience with Low Rate Spanish Mortgages and paid £228 for survey only to find that the survey was never done and the mortgage was refused on the basis of an “In House Valuation” made by a company Dominion Credit and Finance located in Singapore, thousand of miles away from my property in France and that the loan was below the Dominion Credit and Finance funding level. Communications have not been good. I doubt whether they will refund the money paid for a survey which was never carried out. I had hope that it was all above board but I am now convinced that it is a scam and it is highly unlikely that I will get the survey fee back.

Matt Onel says:
June 5, 2010 at 1:30 am

I was approached by ubiquitous mortgages and offered a multi currency mortgage for property in Turkey. They want me to pay the in-house valuation fee upfront as well.
These people have no idea how the buying process works in Turkey as UK nationals require to go through a military clearance process which usually takes about 3 months before a property can be registered in their name (and therefore be mortgageable!).
Also, if the property is ‘valued’ on a desktop from Singapore how can they be sure of the risk factor for the lender’s / underwriter’s capital is tied to? in other words, how do they know the property is really worth the amount of credit they’re offering?
This all sounds a bit too suspicious in the way that they gave me an agreement in principle within hours.

Is there anyone out there who actually DID receive their mortgage through Dominion in Singapore? Can anyone please come forward and do us AND Dominion a huge favour and testify?

However we have received this positive comment from a Mrs Barbara Gosling in Mexico

I read your warning with interest!

While I cannot comment on Clive’s own application, all I can say is that I found the service provided by LRSM to be of an extremely high standard. Indeed, thanks to them I am happily residing in my new property soaking up the sun.

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Posted in International Mortgages, Spanish Mortgages | 12 Comments »

A Review Of Spanish Mortgage Lending May 2010

May 13th, 2010

The last few weeks have seen mixed messages coming out of Spain and the Spanish Mortgage market.

Bancaja who reduced loan to values to 60% at end of last year and removed interest only have in recent days said that they can consider on a case-by-case basis up to 65% loan to value for non-residents. This relaxation is possibly in response to a collapse of their non-resident applications and reverses a trend for them of increasingly tightening criteria’s.

Deutsche bank also announced last week that they have relaxed their criteria from 50% loan to value to 60% for non-residents.

Sol Bank conversely have; whilst keeping their 70% option; increased rates. They have incorporated a first year rate of 2.75% followed by Euribor plus 1.15% this is up from the previous 0.95% above Euribor with no first year rate incorporated.

It remains the case with all the banks with the exception of Lloyds/Halifax that life insurance is being insisted on. All Spanish banks need to cross sell other products to prop up incomes and profitability and whilst it is not legal to insist on other products are now digging in their heels whenever approving a loan. Most Spanish Banks have no access to wholesale funds to provide loans so are very reliant on lending the deposits they have and profit from other income streams.  It is also still the case that even where funds come from wholesale markets the price the banks have to pay for this money and the rates they can charge leave little actual short-term profit on lending.

More and more banks are starting to offer special mortgage terms for clients buying bank stock although promotion of this remains poor except where banks are promoting the offers to Spanish Nationals.

The trend for Euribor rates last month was upward and whilst these increases are very very small we seem to have hit the bottom on the Euribors with the trend of downward movement at the very least stalling. This does not mean we will see big increases in the various Euribor rates but small and steady increase across the board during the next few months.

All in all the news is a mixed bag with some positives and some negatives. I suspect this trend will continue as each bank assesses their own current market position and balance sheet strength with no clear consensus amongst banks as to the overall way the market is moving.

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100% Spanish Mortgages Now Available!

April 15th, 2010

Next week under their trading name of Your Spanish Mortgage IMS will be launching their new service aimed at promotion and marketing of bank owned or funded developments in Spain which have unique mortgage facilities attached to them.

As the year progresses more of these type of offers will come to the table. Every bank in Spain is now considering how to most effectively reduce the level of unsold stock they hold and are developing bespoke and attractive mortgage terms to encourage buyers and to provide access to buyers who have limited deposits and would normally be precluded from buying in Span due to lack of capital.

All banks will still require that clients fit their designated criteria on incomes and are able to provide evidence of this but the banks will take a more flexible approach to risk assessment where the client is committed to buying one of the banks own properties and in many cases will provide up to 100% of purchase on a loan.

Under Your Spanish Mortgage brand IMS will provide a transparent and cost effective service which includes securing of the property and all mortgage related work and will continue to work with the banks to develop and find further interesting and lucrative mortgage deals attached to good value and fully legal new developments.

Using long established relationships IMS are working hard to ensure that these types of deals; readily available and accessible to residents of Spain; are also provided to non residents and will update their portfolio on a regular basis.

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Is It Time For The Spanish Caja’s To Change?

April 15th, 2010

This week there has been much press about the Caja’s in Spain.

Comments have come from government, analysts and the Chief Executive of Santander. All however are saying the same thing. The Caja’s must recognize and take action to bolster their liquidity and deal with their growing level of property ownership as their defaults on loans grow.

Caja’s equate to half of the financial service service providers in Spain and are unlisted businesses closest in terms of UK to building societies. Unlike building societies however which are owned by their members Caja’s are owned and run in general by political parties or regional political bodies.

Caja’s profits and policies are therefore used by the owners to enhance and finance their political agendas either at a local or national level. This means risk decisions and pricing are skewed toward political rather than business aims. Lending policy may be directed to certain groups or certain areas of funding completely at odds with what might be commercially viable but in line with gaining votes from sectors the local politicians either support or need in order to stay in power. When everything was booming no-one questioned this activity but in today’s environment the use of Caja’s to finance political agendas has become a serious problem.

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Beware Of Hidden Taxes When Buying Bargain Property In Spain

March 11th, 2010

Back a few years ago it was common practice for buyers in Spain to pay to sellers an element of the transaction in cash and declare the value of the property at completion at a lower amount than actual purchase price. Clearly, this activity was illegal and an avoidance of transfer tax on behalf of buyer and capital gain tax on behalf of seller. It was however indicative in the system with even Notaries turning a blind eye when briefcases full of cash were blatantly counted in front of them.

Because money was flowing into Spain tax authorities rarely questioned transactions where clearly the property price being seen as being paid was very low in comparison to either the formal valuation of the property, the minimum amount registered as value at Town Halls or the mortgage level.

How times have changed. Black money transactions have now disappeared from the Spanish system. The arrest and imprisonment of a number of Notaries and lawyers put paid to individuals involved in the transactions being willing to knowingly allow it to happen and it is now accepted by all that it is fact breaking the law not just something that is an accepted practice within Spain.

In 2 years, I have seen no completions where black money has even been suggested as part of the transaction. It just does not happen any more.

How perverse therefore it is that the tax authorities within the regional governments who are desperate for cash are now questioning perfectly legitimate transactions where buyers have bought and paid a price that reflects the current depressed property market or are achieving big discounts on asking price because owners are desperate to sell.

The authorities are now investigating closely all property transactions; as they have little else to do; taking the Town Hall value ( Catastral value) multiplying this by up to 2.5 times and then if you buy at a level below this sending out tax bills for the difference between the tax correctly paid on the actual purchase price and the value the regional government are stating you must have made.

It is almost impossible for you to prove you did in fact pay the amount you signed for at Notary and that no black money transaction took place and as with all tax authorities they can state what ever they believe to be true and apply a further taxation at will. Failure to pay the extra cash they are demanding will result in an embargo being placed on the property.

It is almost beyond belief that in an environment where everyone knows bargains are available and property prices have fallen so heavily and in an environment where Spain needs to kick start its tourist and property industry that regional governments who have very local agendas rather than national ones are using such tactics to fill their coffers.

In the days when they could have legitimately pursued individuals where blatant black money transactions happened on a regular basis they chose not to. Now this does not happen and the reason for the low purchase price is because that is how much is being paid for the property they are insisting that you in fact paid more The tax authorities at regional levels are now telling buyers what the purchase was in “their view” and therefore how much tax you owe.

It is important before you complete on a property in Spain you ask your lawyer to check the minimum Town Hall value apply the 2.5 times increase and then check what you are actually paying does not fall below this amount and if it does that the Lawyer makes you aware of what the tax authorities could say after completion you owe even though in fact you legitimately owe nothing.

Please get a grip Spain! you are ruining your own country. Lack of transparency, government departments who do as they please with no ability for you to argue they are wrong will eventually scare any buyers off and take Spain back to a third world economy.

Buyers before you complete on that great bargain take as many steps as you can to ensure a nasty tax bill is not going to hit you a few months down the line.

It is about time Europe stepped in let us hope someone finally challenges these practice via the European courts and the tax authorities get told to refund the tax they have illegally taken.

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Get A Mortgage In Spain With Nothing To Pay For 3 Years!

March 5th, 2010

Further to my article on the flexibility of Spanish loans where you are buying bank stock. In an effort to sell the stock held directly by the bank one lender in Spain is now offering to non-resident buyers the following mortgage facilities.

  • 80% of valuation or purchase price whichever is lower
  • 0% opening fee
  • 0% redemption penalty for first 3 years
  • Rates from 1.72%

No monthly payments for first 3 years

No interest rolled up

Terms up to 50 years to age 80

In order to qualify for the loan a property must be bought from the banks direct stock.

More information on property can be found at Your Spanish Mortgage.

Further information available from heather@imsmortgages.com

Details of an example property is shown below

Price
€ 274,100

Loan
0 € for 3 years.

Type: Studio or Apartment

  • Location: Mijas (Malaga)
  • Address: Urbanización Playa Lucera, A-32
  • Postal Code: 29650
  • Area: 158
  • Bedrooms: 2
  • Bathrooms: 2

General Characteristics

  • 158 m² penthouse in Mijas 20 km from Marbella and 14 kilometers from Fuengirola.
  • It is distributed in living room, kitchen, 2 bedrooms and 2 bathrooms.
  • The common area has a pool and landscaped garden.
  • It is located 20 meters from the sea, beachfront, located in a quiet urbanization.
  • TL4 Property Reference:
  • This housing is included in the Housing Bancaja Commitment 2010. Buy your home now and pay nothing to Bancaja for your mortgage for 3 years!.

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Spanish Banks Desperate To Sell Their Growing Property

February 26th, 2010

More and more banks in Spain are offering discounts to current valuation on properties they own or are in the process of repossessing.

Bank stock now provides probably the widest and most cost effectively priced property you can find.

Many properties are very much resident style property being in major Cities or areas within coastal regions that are not suitable for holiday homes but if you look hard enough a few gems are around.

Considering bank owned stock before buying is good for clients for two key reasons. The first being the price per square meter you can achieve and secondly because despite tight criterias on finance for non residents of Spain each bank is far more flexible on underwriting and loan to values where the client is buying one of the banks own stock.

There is no hard fast rules each case is taken on an individual basis and individual merit but getting up to 100% Spanish mortgages for right profile client is possible.

In most peoples book this activity is a form of blackmail “buy from us and you get a loan don’t buy from us and loan will be difficult and restricted”. It however works for both parties in the current environment and should not be ignored. Individual private sellers may have issues with it as selling a property in Spain at present is tough enough without the banks being your main competitor for the limited buyers available but until bank stock flows through the whole market will remain static. Perhaps it is just a pill we all have to swallow for the long term good.

If you are a buyer the ability to buy keenly priced property without parting with chunks of your own cash is now more of a reality again; as long as you source the property from the bank you are getting finance from.

Clients would be well advised to talk to brokers who can check up front what might be available if a client buys from the bank. The client then can make any offer to the bank secure in the knowledge the mortgage finance fits their budget and is available.

A good Spanish mortgage broker will be able to search the banks portfolio for you and provide details of possible purchases and then speak to the bank and get an agreement in principle for that property should you decide to proceed.

For more information contact us here.

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Mortgages in UK To Reflect Mortgages in Spain

February 26th, 2010

For many years the banks in Spain have worked off debt to income ratios rather than multipliers of gross incomes.

The FSA in the UK who are looking at changes to be implemented this year after the credit crisis of 2008 and 2009 are looking like they will insist in future lenders in UK work on affordability ratios in the same way.

Fast track lending and self-certification will almost certainly disappear from the market and the documents required for a mortgage approval increase considerably for all applicants as has been the case in Spain.

UK residents will have to get used to providing a significantly increased levels of paperwork which will no doubt come as shock to everyone except perhaps those clients who have applied for mortgages in Spain recently who will already have experienced the high level of due diligence required and heavy document requirements that are insisted on.

Debt to income ratios often provide a higher level of funding for those clients with little or no other debts outside the mortgage but penalize heavily anyone with personal loans or credit card balances.

If the UK follows Spain banks will work off debt to income ratios of around 35%. This means that the amount of money going out each month on repayment of loans, cards and mortgages cannot exceed 35% of after tax not pre-tax incomes.

After years of easy money many clients who previously experienced no issues in obtaining further loans because of a high credit rating will find obtaining lending a much more difficult and painful process.

As brokers in Spain arranging Spanish Mortgages, we are very used to working with these restrictions but know from feedback from our clients that there is a real resistance on their behalf’s to supply so much information and a complete lack of understanding of why and how the banks work. Often clients who are rejected by Spanish banks cannot understand, as they have never had issues raising money in the UK. These very clients may in the future find UK lending difficult to achieve.

One of the key issues of the application process when working off debt to income ratios is everything has to match up so what appears on credit files must match with what is seen going out from bank statements. Because credit files and actual payments do not always match exactly the level of detail, a client then has to provide to confirm actual payments is high and precise and becomes extremely frustrating when dealing with an application as logic and judgment don’t apply just tick box verified facts.

It looks like the days of “The bank has the property as security so what’s the problem” are going to be well and truly over.

I many ways affordability ratios in fact make a lot of sense but there will almost certainly be a cultural backlash to the changes.

For once the UK will follow Spain rather than the other way round.

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