Archive for the ‘Spanish Property’ Category

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

Friday, 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.

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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Posted in Spanish Banks, Spanish Mortgages, Spanish Property, Uncategorized | No Comments »

Spanish Banks Desperate To Sell Their Growing Property

Friday, 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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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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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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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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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 | 2 Comments »

Need A Hacienda San Cayetano Development Mortgage?

Monday, October 19th, 2009

Clients completing on the Hacienda San Cayetano Development in Costa Calida, Murcia are now being contacted with completion dates.

The development was not funded by a bank so no developer’s mortgage is available which means clients requiring mortgages will need to shop around for their financial needs and arrange independent loans.

If necessary to allow this to happen clients may need to delay anticipated completion and negotiate with the developer for a little more time.

It is hoped the developer will be reasonable in allowing this extra given the complete change in mortgage availability in comparison to when most clients made a decision to buy.

For information on what lending facilities could be obtained and information on how to try to get an extension on completion date contact IMS now.

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CAM Bank Spain Sends Out Threatening Letters To Clients In Mortgage Arrears

Friday, October 16th, 2009

A number of clients who currently hold CAM bank mortgages and are in arrears have recently received letters in the UK from a lawyer firm telling clients that should they fail to bring the mortgage up to date it is possible CAM Bank may pursue assets in the UK.

Whilst clearly the bank has the right to try in anyway they see fit to ensure the mortgage arrears are cleared these tactics; without also offering workable payments solutions for clients in difficulties; is harsh and possibly misleading.

Whilst it is true that ultimately should they be left with an outstanding debt CAM can technically look to the UK to recover money (so no client should ignore the possibility) the process and facts are less black and white.

Firstly, the process of repossessing the property would have to happen and then the property would have to be sold to crystallise the actual debt outstanding. This can take years.

Secondly, whilst it may be true that in its distressed state the property will not reach the amount outstanding; to pursue a UK residents assets to fill this shortfall would require UK court action.

Logic says that unless the bank is clear the client has sufficient net asset wealth in the UK; where another lender does not already have a first charge; and that the loan level outstanding is sufficiently high enough to make the cost and time of going through UK courts worthwhile even CAM bank will not add to their woes by pursuing further small outstanding amounts through a long legal process in the UK.

It would also be difficult although not impossible to see a UK court agreeing to their action when most clients have had little or no advice upfront into exactly what they were signing at outset and where the bank took no steps to ensure this was the case. CAM rarely or never offer workable solutions to clients to assist in keeping up payments like offering a term of interest only, a minimum payment for an agreed set time’ or a payment holiday as would be expected of UK lender which again would not work in their favour.

In the UK lenders are expected to have demonstrated they have done everything within their power to avoid getting to the point of court action and are heavily criticised if this is not the case.

CAM’s solution to their own problem; which has occurred because they of all banks in Spain took on risky non resident lending at high loan to purchase prices, undertook poor due diligence on documentation and left many lending decisions in the hands of branch managers who were only targeted on sales is to threaten rather than negotiate and worse than that threaten something that they know will cause severe stress and concern to their clients but in reality is unlikely action they will take.

Of all the enquiries, we get for re-mortgages 75% of them come from existing CAM bank mortgagees which sums up how poor across all elements of customer service CAM is.

My advice would be do not ignore the letter and take your own legal advice immediately if you are in arrears.

If you are not in arrears but fed up with CAM’s lack of service look to change to another lender where costs of move are covered; like the Halifax Switch and Save.

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Posted in Spanish Banks, Spanish Mortgages, Spanish Property | 5 Comments »

Spanish Banks Adding Compulsory Products To Mortgage Terms

Friday, October 16th, 2009

Increasingly all banks in Spain have been adding compulsory and for them profitable products to their mortgage offers.

It is in fact not legal in Spain for the banks to tie clients into products outside buildings insurance and a bank account unless the client gains a rate benefit for doing so. This seems to however be making no difference to the banks insisting on clients taking up; in particular life insurance; for the benefit of having a loan.

Where a bank links the rate or margin above Euribor to the taking of a specific product this will be written into the mortgage deed and should you cancel the linked product during lifetime of loan a new higher rate will automatically be applied. Whilst having the reduced rate may appear attractive, the cost of the linked product each month needs to be added to the monthly payments and often makes the overall terms more expensive than a higher rate without. If life insurance is required by the you this is of course not an extra cost and the lower rate may be of benefit but if life insurance is not necessary then this is just another sum of money on top of costs expected.

For banks that do not provide a specific rate linked to products; to gain an approval clients may however still find themselves being blackmailed into taking an insurance policy just to get an offer. Whilst it is not legal to insist a client takes the product a bank can of course reject an application without giving rationale so playing the game to get an approval is the pragmatic approach most clients will take.

Under this scenario however whilst the client may have to sign up for life insurance in year 1 the insurance requirement cannot be embedded in the mortgage deed and if the client cancels policy after year 1 there is absolutely nothing a bank can do to force client to take it in subsequent years.

Because of the cost of extracting yourself from Spanish mortgage terms at a later date; it is important to check if life insurance is being stated as compulsory for an offer of lending and whether this is going to be written into mortgage deed and linked to a rate or not. You can then assess what level of flexibility to dispense with the insurance cover at a later date you may have.

The poor behaviours of banks who are taking advantage of the overall difficulties in the worldwide lending market to force clients into taking other products immaterial of whether they are required or not is extremely frustrating. The law, which should assist to stop this happening, is toothless because it only relates to a completion and ability to place requirement in a mortgage deed; banks can do what they like when deciding whether to complete on a particular application. One lender in Spain “Bancaja” have a central risk department team that underwrite and approve an applications but the branch managers of the local branches who have the final say can, and often do, refuse to complete unless life insurance is added so if you want the loan you have to sign up or go without the mortgage even though you fit bank criteria.

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