Archive for the ‘Spanish Mortgages’ Category

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Low Rate Spanish Mortgages -Update

Tuesday, February 9th, 2010

Further to my article on yen mortgages supplied by Dominion credit I have received 2 further communication inputs from clients who have applied for a mortgage via Low Rate Spanish Mortgages.

Over the Christmas period Low Rate Spanish Mortgages pulled back their pay for click and paid for link activity but are back with a vengeance. They state 800 applications were approved last year. This is pretty spectacular as even at the height of the selling market we; who were the leading supplier of non resident loans; completed on about 500 mortgages each year. Given lack of non resident sales in Spain last year they must have cornered the whole market with no-one else lending at all!

They say they charge no fees but the feedback I have received indicates you are asked to pass an amount of money apparently for a valuation and this is payable upfront but the property is not visited a desk top valuation is done and what is considered for the valuation is not clear.

The Chief Executives house in Mexico which is being raffled in a spot the ball competition which was due previously to have the winner announced in November 2009 has now been extended to when they have 76,000 entries. At € 25 a pop, this would pull in 1.9m euros for the owner if closing date does not get extended again.. European competition laws that cover this type of competition appear to be being contravened.

Many quality websites and portals like Eye on Spain, Guardian financial site are accepting Google ads giving credence to the company.

It is amazing that no-one checks the advertisers on their website.

The solution to this surely sits with the companies that allow the advertising to be run who should undertake far more due diligence to ensure the advertiser is following European laws.

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.

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.

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 Spanish Banks, Spanish Mortgages, Spanish Property | 3 Comments »

Confusion Reigns Over Abbey National’s Spanish Mortgages

Friday, January 22nd, 2010

Further to my article on Abbey Nationals ( now renamed Santander) Spanish offering from their mortgage centre in Bradford it would appear even the staff in the centre are confused about their offering.

Whilst we cannot access this product on behalf of clients; as an advice company it is important to us clients are aware of all options available to them. I am however a little concerned about the conflicting information provided by Abbey and hope over the next few months the information given improves.

This I believe is vitally important in Spain where when purchasing non refundable deposits can be passed over. If you think you are getting 80% and have an approval in principle it would be a nasty shock to find out 12 weeks down the line you can in fact only get 75%.  My belief is that 80% is possible but given feedback this week I am now a little unsure.

This week alone; including one personal call to them made by me; varying terms have been outlined to clients accessing them.

These have ranged from

  • 75% of valuation to 80% of valuation or purchase price depending on which consultant you speak to.
  • Rates of 1.35% above 12 month Euribor with 12 month Euribor being quoted at as low as 1.11% or 1.99% again depending on consultant at other end.
  • 1% redemption penalty for lifetime of loan, which was a shock as by law in Spain maximum, should be 0.50%.
  • Timescales for applications ranged from 6 weeks “might take longer” to it is 12 weeks and will not be any quicker.

Where all consultants were in agreement the following terms were offered.

  • Fixed rates of 6.8% for a three-year fix or 7% for a five year fix
  • Bank fee 1.25%
  • Term maximum 25 years up to age 75 years
  • Minimum loan size € 40.000
  • Minimum income single applicants £ 30,000 per year
  • Only Mainland Spain covered

All consultants were also obliged to tell client they could give no advice as to suitability of product and that clients were taking a non-advice transaction.

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Polaris World Go Bust!

Friday, January 15th, 2010

Polaris World have announced they are seeking to go into receivership.

How exactly this will affect those purchasers, whose properties have no yet been built is as yet unknown.

Each phase was funded by a different bank the key banks being

  • Bancaja
  • CAM
  • Caja Murcia
  • Banco Popular

Whilst all these banks will have provided Bank Guarantees protecting clients deposit monies most phases have now fallen outside the agreed dates for evoking the guarantee so clients may have to fight through the courts to get their money back, be offered a suitable alternative or have unit finally finished by another buyer of the whole development or phase.

If the clients lawyer did not inform the client at the point the delay on build had met bank guarantee rules, the bank guarantee may now be null and void. Any clients affected should immediately contact their lawyer to discuss their particular situation. If the bank guarantee has lapsed, changing lawyer and speaking to a lawyer from who is independent may be the most appropriate solution. There are already a few lawyers looking at class action to reduce court costs to individuals and a meeting is taking place next week W/C 18/01/10 to clarify exact situation and what action can be taken by those affected.

For clients who have already completed without golf course, hotels or facilities being in place it could be a long time before these are now developed if ever.

The Polaris developments which were dreamt up in much happier times and supposed to provide self-contained holiday villages at affordable prices will sadly have turned into a nightmare for many UK clients.

Over time these issues will be resolved and one day hopefully the Polaris vision will finally live up to its expectations. For investors it could however be a long haul.

If independent legal advice is required contact heather@imsmortages.com outlining which development phase was bought and current situation along with your full contact details. Your enquiry will be passed to a lawyer already taking action on behalf of other clients.

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Abbey Spanish Mortgages – Abbey National Buck The Trend On Spanish Lending

Tuesday, January 12th, 2010

Abbey National, who are soon to be renamed and re-branded Santander,  completely in reverse to all other Spanish lenders (who are tightening criterias, lowering loan to values and increasing margins) are offering 80% loan to values at 1.25% above Euribor for Spanish mortgages.

This offering is somewhat strange as if you access Santander in Spain via their branch network the maximum loan to value is 70% with most only being approved at 60%. Why  the two parts of the same bank have very different offerings for non-residents buying in Spain is a mystery.

Abbey National from their mortgage call centre in Bradford will only deal direct with clients so the broker market both those based in Spain and brokers based in UK are precluded from placing clients or being a position to explain the product and its features to their clients.

Abbey offer to explain everything necessary to the client but given the obvious lack of a link with their Spanish owners it is debatable whether the staff dealing with the mortgages are suitably experienced to ensure a client does fully understand the obligation they are taking out and how it works.

Clients with an existing Santander loan who are unhappy with the product and state the full implications were not made clear when it was taken out often contact me. This included no explanation of how the mortgage worked and adding of compulsory products embedded in mortgage deed, which were not explained at offer. Whilst these issues will be from mortgages arranged via the Spanish Network one does wonder how much better the UK counterparts will be.

Overseas lending even if taken direct from the bank based in UK does not fall under FSA scrutiny and whilst I am sure Abbey would not take advantage of this fact it should be borne in mind by clients. Taking the loan from a UK based lender provides no more protection than using a mainland Spanish Bank

One crucial question that should be asked is if the loan will be registered in UK and shown on UK credit files. At present, this is not the case with other Spanish Lenders and only Scottish Widows who have since withdrawn from market used to do this. It is one of a number of important factors that should be understood before signing.

Whilst it is not yet widely marketed the loan offering from Abbey National should be considered when thinking of buying in Spain. It is by far the market leader in terms of features and overall pricing and should form part of every client’s research.

How efficient they are; how much they understand about requirement in Spain to protect clients deposit monies; which unlike the UK are non refundable; and how stringent their risk criteria’s are and therefore how many clients they actually approve remain to be seen. Time will no doubt tell. Giving themselves a fall back position of another lender may well be a sensible route for all clients just in case the upfront offering does not live up to expectations.

Abbey can be contacted on 01274 742781.

More information on Abbey Spanish Mortgages

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Spanish Mortgages: A Review Of Lending December 2009

Wednesday, December 2nd, 2009

Despite the current banking issues obtaining a mortgage for buying in Spain is still available. Lenders like Halifax, Lloyds with their UK roots remain committed to keeping a presence in Spain.

Spanish banks are also still providing finance.

The key change from a couple of years ago is the risk criteria’s are now rigidly followed; pricing this being the margin above Euribor the banks charge has increased considerably and overall terms and flexibility of product have tightened. Euribors themselves remain at an all time low, which means despite margin increases rates are around 2.5%.

The majority of banks are now back to 2001/2002 loan to value criterias. This means most banks provide a maximum of 60% of purchase price and in most instances limit this also to 60% of purchase price. A few banks remain that may provide a loan larger than their percentage of valuation but they  will still have maximum limits on what percentage of purchase price this will be. 100% financing is a thing of past.

One bank is currently offering 70% of valuation to non-residents as standard and Santander via its Abbey National arm will consider 80%.

Underwriting is very rigid in current environment and some purchasers particularly those involved in the property industry in UK may find themselves precluded from borrowing however for most clients who fall within current debt to income ratios; whilst the level of paperwork required to prove affordability will be very high; a loan will still be available.

Interest only facilities for up to 5 years are available but most Spanish banks are now only offering repayment loans with terms up to 30 years.

Maximum ages have dropped with most mainstream lenders now wanting the mortgage paid off by age 70 years.

Most buyers still find obtaining a Euro mortgage the most attractive option given current exchange rates between the pound and the Euro. Many cash buyers still want to consider a Euro loan with a view to paying mortgage off when and if exchange rates recover to historical levels. Taking a currency loan remains unusual and only suitable for those clients who understand and can manage the currency rate fluctuations.

It is difficult to see banks improving flexibility, relaxing criteria’s or aggressively seeking lending in 2010 however, the market seems to have bottomed out and it is expected that current criteria’s will not worsen in the next 12 months.

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When Can You Buy Distressed Property In Spain?

Wednesday, November 18th, 2009

When buying a distressed property in Spain you have a number of points at which you can try to secure the property.

The first point is when the current owner is experiencing difficulties but before the bank starts any action (where a mortgage is involved). The owner may be willing to drop price significantly to avoid repossession being instigated particularly if they are a Spanish Resident.

The second point is when the bank has first started action but before the courts become involved. At this point any price agreed would have to at least cover the banks loan and be in agreement with bank to delay further action to allow sale to take place

The third point is at auction; once the court action has been started it is very difficult to halt and auction must take place. At auction, you could buy property for 75% of the auctionable value as recorded on Nota Simple. This will normally be 75% of original valuation.

The fourth point is after auction and before the bank has to take property over. At this point, a bank may be willing to part with property for below the actual mortgage amount outstanding rather than take over responsibility for property, pay transfer taxes and have to maintain property until a future sale. This point is ideal for cash buyers who will get best price possible.

The final point you can buy a distressed property is  when the bank has taken into onto their books. Some banks appoint their own agents and often these properties can be seen on banks websites. At this point the bank will be looking to cover loan plus any costs associated with taking property over so price almost certainly will have increased. It is however possible to negotiate and the bank may also provide a Spanish Mortgage at loan to values not normally achievable, to allow the property to be moved on quickly.

View Our latest Spanish Distressed Property List

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Changes to Halifax Switch And Save Spanish Remortgage Product

Friday, November 13th, 2009

This week on top of rate increases the Banco Halifax Hispania announced it will be increasing the minimum  loan level for its Switch and Save re-mortgage product in Spain to € 140.000 from its current € 100.000. As this product remains, the most cost effective route to moving your loan in Spain this is bad news for any customers caught in mortgage products with minimum interest rates or those who for financial reasons need interest only.

Applications loaded on the banks system received within next 15 days will be held at the € 100k so anyone with a loan less than € 100k or where loan size at a valuation of 60% would not reach the € 140k needs to get their skates on.

Outside Halifax; Barclays are the only other lender offering any sort support to clients moving but this is maximum 50% loan to value, no interest only and up to € 3.000 of costs covered not full amount.

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Low Rate Spanish Mortgages

Friday, November 13th, 2009

This week further to my comments on Low Rate Spanish Mortgages and Dominion Credit, I received a correspondence from a client who has had experience of dealing with them. It would appear my concerns about their Spanish Lending facilities have some validity and there remain many unanswered questions about these two companies.

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.

I was also somewhat surprised when reading a web based article from the Guardian newspaper on GMAC fines in UK where the Guardian was doing plenty of back patting on how they raised the issue of GMAC unfairly treating clients in arrears to see a sponsored link at bottom of article from Low Rate Spanish Mortgages.

I have written to the Guardian asking how on one hand they can write an article criticising a bank for repossessing properties that are in arrears and at same time by default appear to  promote a company whose practices should cause concern.

I have as yet had no response. Perhaps dubious lending practices are only the Guardians concern if they are not earning any money out of it.

Posted in Spanish Mortgages, Spanish Property | 1 Comment »

Halifax Announce Spanish Mortgage Interest Rate Changes

Wednesday, November 4th, 2009

From 9th of November Banco Halifax Hispania will be increasing margins above the Euribor which they charge clients for Spanish mortgages.

Halifax are now distinguishing not only between rates applied for interest only but also against loan size and whether 12 month or 1 month Euribor is selected.

The pricing is somewhat complicated making decision making on whether Halifax is best lender in longer term and whether the right index has been selected more difficult to make.

Interest only is now looking a lot less attractive at 2% above 1 month Euribor up from the previous 1.4%. 60 basis points is a huge jump. They remain however with Lloyds one of the few lenders offering the facility.

Other applicants most penalised by the changes are those who require loans of less than € 100.000. You will now pay 0.20% more in margin for the same loan to value if your loan is below € 100.000 rather than above.

It is expected that Lloyds will also announce the same rate margin increases as the two continue their merger activity and bring criteria unto line. It is also expected that Lloyd International the third Spanish mortgage distribution channel will fall in line on rates and criteria.

Banco Halifax and Lloyds will be very focussed next year on maximising incomes from mortgage clients and cross selling of other products will be the key focus of branch staff.

It remains to be seen how much time is dedicated to also making sure clients understand the mortgage they are taking out.

It is hoped that training for branch staff advising clients who access Halifax direct is improved from previously including their international department who most UK clients end up dealing with as getting it right and ensuring client knows exactly what they are taking has just got a whole bundle more complex.

The three year fixed rate on repayment at 3.75% is looking the best value of the portfolio.

Same fixed rate on interest only at 5.35% is looking unattractive.

At IMS we are dedicated to ensuring factual information is provided so anyone unsure of what they are being offered and whether it constitutes good advice should contact us now.

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GMAC Spain Look To Close Down All Their Operations

Monday, October 26th, 2009

GMAC who two years ago withdrew their self certified product from Spain are now writing to existing clients to try and reduce their Spanish mortgage book so they can remove their administration centre from Spain in its entirety.

GMAC Spain are offering clients a reduction of 10% of the outstanding capital owed and to cover all costs of the move of the mortgage if the client can find a lender to take over the loan.

This offer provides a great alternative for any client in a position to take up GMAC’s offer. Having the capital reduced by 10% is a fantastic deal and at the same time given GMAC rates were high a lower rates could also be achieved making it a complete win, win situation.

The key issue for GMAC clients is that they probably went to GMAC because they could not evidence incomes; as no other lender allows self certified a move to another provider will only be possible if incomes; sufficient to meet the new banks criteria can now be proved. Re-mortgages are also only available at 60% of valuation and GMAC lent at the height of market at 65% loan to value.

Many self-employed clients may however have chosen GMAC as the simplest route rather than their only route and could in fact qualify for another lender; other clients circumstances may also have changed sufficiently for them to now be able to evidence the incomes they declared to GMAC allowing a move to happen.

Any clients wanting to check if they can be accommodated by another bank and take advantage of the current GAMC offer can contact us at IMS to check their overall situation and feasibility of a new lender taking over the loan.

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