• 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

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!.

Get A Mortgage In Spain With Nothing To Pay For 3 Years! is a post from: Spanish Mortgages Experts International Mortgage Solutions

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.

Spanish Banks Desperate To Sell Their Growing Property is a post from: Spanish Mortgages Experts International Mortgage Solutions

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.

Mortgages in UK To Reflect Mortgages in Spain is a post from: Spanish Mortgages Experts International Mortgage Solutions

It is interesting that, until recently, little has been done by the Spanish Press.

Unlike UK press Spanish newspapers rarely go on crusades or overtly criticise the government preferring it would seem to just report facts or what is said rather than getting beneath issues.

This may well be a throwback to Franco days where freedom of speech was non existent. One should remember the press in Spain from that perspective is very much in its infancy and perhaps will take sometime to catch up particularly in the area of investigative journalism.

The current size of the crisis in Spain could have been avoided and even myself without the benefit of an economic degree or full understanding of the political dynamics recognised the issues some 6 to 7 years ago.

Having lived in Spain since 2002 I have seen the impact of the current economic situation but also the drivers that caused many of the internal issues we now have.

These experiences are not derived from the press or authority as to my shame I still neither speak or read Spanish fluently enough but as a small business owner who has been involved in the property industry as mortgage broker.

Most recent quotes from UK and economic authorities point to the fact that whilst Spanish Banks did not have exposure to worldwide toxic debts they have created their own.

This is in fact very true. Much is now reported about the problems the Spanish Banks have as they become more like estate agents than banks.

It is quite perverse that in 2003/2004 before the new government took over the then governor of Bank of Spain in his monthly report warned all Spanish banks in very strong terms that the level of funding they were putting into construction was too high and unsustainable. This statement was made formally and is available via public records.

Back at the point the governor shot this warning across the banks bows the level of funding for new construction was small in comparison to the level funded during the boom years of 2005 to 2007. What a shame for Spain that because of a terrorist bomb they voted out a government that had a handle on what was happening and was taking steps to prevent overheating; and voted in instead a government who had neither the desire or intellectual capacity to recognise that even without the now widely reported credit crisis Spain was heading for disaster.

The Spanish Banks themselves cannot say they were not warned. They just chose to ignore the warnings they were given and take heed of the appeal from the Bank of Spain to restrict the level of funds being provided for new construction.

It is very easy to look at the whole Spanish system, how licences for new builds are provided, who has authority to grant them what controls central government takes to see why the complete mishmash and vast amounts of unoccupied properties we now have has happened. The whole political infrastructure needs to change dramatically for Spain to ever sustain their G20 status in the longer term. Without fundamental changes it is difficult to see Spain ever pulling out of the boom to bust syndrome which has dogged them since Franco died.

I am; all this said; at loss as to why the country is in such a financial mess and where the vast amount of expenditure goes.

Taxation levels are high; it is a fallacy that tax in Spain is low. On costs of employing people are a big disincentive and rigid labour laws compound this issue.

Average monthly wages are very low and social support also much less than other European countries.

There are for instance no

• Tax credits
• Rent support for low earners
• Social security payments for unemployed are 400 euros a month once the initial dole runs out. This is it a flat payment that is not even enough to feed a family.
• Healthcare is generally good but the state does not support the health system in the same way as the UK and many opt for private health insurance and many hospitals are completely privately run
• Money spent on education again is combined with many private or partly funded schools
• Roads are not extensively lit and most new ones built done from EEC funds
• Post service appalling
• Public transport very limited

The bulk of expenditure must be spent on supporting a Civil Service that is bigger and more bureaucratic than Gungerdin. The level of inefficient government services and departments is scary.

Lack of control of expenditure by central government is well demonstrated at even micro levels. In my village alone around € 200k has just been spent on building a so called memorial that had to be built before end of 2009 or the money sent back to central government. I expected a statue which I already thought was a complete waste given current climate what in fact has been built is a property. For what purpose I am not sure.

We already have a completely refurbished and grand Town Hall and more facilities than one might expect for a population of 2000 people whilst one third of its population live in sub standard housing often with no running hot water.

Having lived in both UK and Spain I know public services are not as good in Spain and social support woefully lacking. It is therefore in fact quite frightening how much the government are in debt in comparison to what tax money supports.

Making cuts to avoid a Greece type collapse should be easy but getting Zapatero, who is known as Mr Bean by the Spanish,  to actually get to grips and resolve matters is rather like asking a 3 year old to explain the theory of relativity.

The Spanish Economy as Seen by the Little People is a post from: Spanish Mortgages Experts International Mortgage Solutions

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.

Low Rate Spanish Mortgages -Update is a post from: Spanish Mortgages Experts International Mortgage Solutions

• Trusting mortgage providers without meeting them: Yes, some of the best deals are found on the Internet, but the downside of this great communication tool is that people are anonymous. This raises the question of how much you can trust them to finance your mortgage, especially because the sum is large. So don’t jump at the cheapest offer you get without doing your research about the lender or the broker you are dealing with. In general, your safest bet would be to conduct the transaction through trusted brokers who have established a strong reputation in the international mortgage business, although some people prefer to deal with the local branch of large international banks like HSBC, Lloyds TSB or the Bank of Scotland who have a wide international presence and who are accustomed to dealing with international mortgages on a regular basis. You may have to pay a little more by way of fees or interest, but this beats getting cheated out of all your money. Trustworthiness is the most important factor when you’re securing an international mortgage.
• Not understanding all the terms and conditions: International mortgages come with a host of terms and conditions, all of which vary according to the bank you’re dealing with, the country of your origin, and the country in which you wish to purchase property. So do your research thoroughly and be aware of all that could possibly go wrong before you sign on the dotted line. For example, some banks finance only 70 percent of your mortgage, others require you to pay upfront at least 30 percent of the cost of the property as a down payment, and yet others will want access to all your credit records before they sanction your mortgage. So be prepared, and understand all that you need to know before you commit to anything.
• Not being aware of local laws and customs: When you’re buying property in another country, you must be aware of local customs and laws, whether you’re going to live there or if you’re just buying the property as a vacation home. Your property may be subject to special taxes besides what you regularly pay; you may have to follow certain customs and change your habits in order to live there on a regular basis (follow unwritten laws of the neighbourhood to ensure harmony and avoid rifts with the neighbours); and seek the help of translators if you’re not familiar with the local language and culture. Also, if you’re going to be away from the property more often than not, ensure that you set up adequate protection methods to prevent theft and vandalism.

This guest post is contributed by Nicole Adams, she writes on the topic of Construction Management Degree . She welcomes your comments at her email id: nicole.adams83@gmail.com .

3 International Mortgage Pitfalls You Must Be Wary Of is a post from: Spanish Mortgages Experts International Mortgage Solutions

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.

Confusion Reigns Over Abbey National’s Spanish Mortgages is a post from: Spanish Mortgages Experts International Mortgage Solutions

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.

Polaris World Go Bust! is a post from: Spanish Mortgages Experts International Mortgage Solutions

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

Abbey Spanish Mortgages – Abbey National Buck The Trend On Spanish Lending is a post from: Spanish Mortgages Experts International Mortgage Solutions

Unlike UK where the IHT bill is against the estate of the deceased IHT is the responsibility of the beneficiary. This means that IHT must be paid before any assets can be taken over and ability to sell assets to pay IHT is not possible.

As if this in itself does not cause enough problems when the beneficiary cannot pay the IHT without crystallising the assets  you cannot be paid out on life insurance either until the IHT bill is paid.

Clearly, it would be far more beneficial for non-residents of Spain to take life cover outside Spain. Where life cover is taken outside Spain payment will be made and these payments could then be used to settle any IHT bills in Spain and enable beneficiary to take over assets.

None of this is explained by banks in Spain who have no regulatory requirement to undertake best advice and a code of conduct such as UK banks have to follow. It also tends to suggest that banks sell life insurance purely for the premium income it provides them rather than as protection for the individual and the bank where a Spanish mortgage is concerned.

The law as it stands seems to help no-one. Spain has many outstanding IHT bills where beneficiaries have to leave properties to eventually turn into ruins as the cost of actually inheriting property is not something that can be met without ability to use asset to pay the bill.

If taking a mortgage in Spain it is therefore important for people to consider how any IHT would be paid and not to rely on any insurance taken in Spain to resolve this.

Spanish Inheritance Tax: Spanish Life Insurance Will Not Cover It is a post from: Spanish Mortgages Experts International Mortgage Solutions