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.

Halifax Announce Spanish Mortgage Interest Rate Changes is a post from: Spanish Mortgages Experts International Mortgage Solutions

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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.

Need A Hacienda San Cayetano Development Mortgage? is a post from: Spanish Mortgages Experts International Mortgage Solutions

It is difficult when watching a programme like this not feel sorry for some of the individuals involved but for all those involved the issues need never have happened with correct advice. It would have been very helpful if the documentary had outlined on each case study what the actual steps should have been taken and what can be done by buyers wanting to buy in Spain to ensure they do not find themselves in the same situation.

The buyers who bought at La Zenia Elite made a number of errors or were badly advised by their legal advisers. Protection against exactly what happened to them is in place in Spain and is robust and legal. Failure to follow simple rules are what caused the outcome they have. If you are buying off plan in Spain by law the developer must have a bank guarantee. The bank guarantee, guarantees the deposits of the buyers should the developer fail to complete build or go bust. Each development should be able to produce a bank guarantee certificate which clearly stipulates; the terms of the bank guarantee; when it can be invoked and under what circumstances. It will also outline what interest rate compensation would be payable on funds tied up as deposits. If this certificate is not available, visible and terms not understood then deposits should not be passed. If the certificate is in place, is understandable and it’s terms are acceptable then deposits can be safely passed as a bank is underwriting the cash.

Secondly, a development is only complete when the whole development or that phase has what is called a habitation licence. This licence is another legal obligation and is confirmation that all works as per the licences originally granted have been finished and that the property meets the legal standards required. Without this licence it will not be possible to get direct mains water, electricity etc connected to individual properties so anybody moving in before it has been issued will rely on developers utilities. The habitation licence may take some weeks to be granted and people do get talked into completing before the certificate is issued by Town Hall. Passing over full funds and completing at Notary before it is issued is one of the most common mistakes made and under no circumstances should a buyer do so.

Legally they cannot be forced to complete whatever pressure they are put under by the developer or seller without this document. Legally the document confirms all works are completed to the standard required. Without this licence at any time the property could be deemed as built illegally, not meeting the original plans that permissions were granted under and getting utilities connected may be impossible. With it you are safe.

The same applies to re-sales if it does not have an actual certificate available even on older properties take great care and ensure property is not only registered locally but forms part of the Junta’s and national current 5 year urbanised plan known as the PGOU. All buyers should read the small print on any marketing material as all developments only require the developer to finish and complete the buildings for living no contract ever requires the developer to complete any additional infrastructure including club houses, golf courses, health clubs gardens etc.

All buyers should take this account when deciding to buy as if not having the golf course would mean you would not buy don’t buy because there is no guarantee or obligation for it to be provided by law. If the golf course is a specific requirement and what makes the property appealing buy a property where the golf course is completed not in the planning stages.

It would be very helpful both for buyers and the total market if along with the headline horror stories these type of documentaries helped educate people how to take all precautionary steps they can and how to understand the actual remaining risks they may be taking. Most things in life are a risk but taking an informed risk is a completely different ball game to taking an uninformed risk.

It is not true and has never been true that banks accepted mortgage applications if you “ had a pulse and a passport”. When I started arranging mortgages in Spain some years ago it was true that the banks did less checks than now but the real issue has been the exodus of brokers from the UK seeing Spain as a good place to earn a quick buck without regulation who convinced clients to falsify papers, take loans they could not afford or use dodgy valuations to get in mortgage funds for more than the property was worth. These activities have sent the finance market in Spain for genuine buyers into turmoil making any application now very difficult to obtain. This is due to a high delinquency rate of mortgages with clients who have no embedded interest in the property in terms of their own cash and properties worth less than the mortgage amount. The banks in Spain are now so pedantic on applications that arranging a mortgage has become an unnecessarily onerous task even for quality clients.

Taking a mortgage in Spain is different to UK the whole process from application through to securitisation does not reflect the UK. Again many clients have fallen foul because they have either made big assumptions of how it will work or have been badly advised or have gone to banks direct who do not explain clearly or in English exactly how the mortgage will work in the longer term. In fact again the Spanish Mortgage market is clear, understandable and its idiosyncrasies known to any broker who is experienced and takes the time to protect the client fully. This means just like the UK the broker should take into account the legal issues surrounding buying a property, land classifications and be able to explain to the client fully the implications of any actions they are planning to take.

ITV 1's Paradise Lost – Good Mortgage Advice Would Have Helped is a post from: Spanish Mortgages Experts International Mortgage Solutions

Amongst the banks considering this are Sol Bank part of the Sabaddel Group who are currently discussing the possibility of discounting repossessed new builds by up to 30% to 40% of original purchase price and providing up to 95% of the purchase price on Spanish mortgages for non residents of Spain.

Currently Bank of Santander owners of Abbey National in UK have such a scheme at 100% of purchase price in place for residents of Spain but no one to date has bitten the bullet to provide a similar option for non resident buyers.

The banks will restrict any such offerings to a certain profile of client. Their mortgage provided may have different terms to their standard mortgage and come with linked products but at much higher loan to purchase prices than is currently achievable. Almost certainly, the risk profile will be directed at those potential buyers with low existing loan exposure in their country of residency, have high and clear after tax income levels which could be in the region of minimum £ 50,000 pa and take income from means other than just retained profits or dividends.

For serious buyers of second homes or holiday homes these bank discounted properties could provide excellent value with minimum capital down. The quicker surplus stock can be moved the quicker the whole market will re-cover. Whilst pure investors will probably find themselves excluded from the Spanish mortgage schemes attached to these sales the discounts may still provide a good long-term return on surplus cash they are holding.

Finally Some Good News From The Spanish Property Market? is a post from: Spanish Mortgages Experts International Mortgage Solutions

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Caja Castilla La Mancha like Caxia Catalunya was a large regional bank who ventured outside their normal stronghold and both banks now have a nationwide presence. For what were regional banks both have a large number of branches and many jobs at risk without government intervention. Spain’s government do however appear to have acted decisively and quickly with Caja Castilla La Mancha after other banks refused to take over exposure to their risk and it is hoped that Caxia Catalunya if existing problems cannot be resolved will also be assisted.

Margins above Euribors continue to increase weekly. Bancaja one of the few non-resident Spanish Mortgage lenders remaining at 70% loan to value put margins up across the board this week and introduced a first 6-month rate that is well above prevailing variables. The lowest margin with Bancaja is now 1.39% above 12 monthly Euribor with a first 6-month fix of 3.90%.

Halifax’s Spanish arm Banco Halifax Hispania have now issued small lending targets to branches which is a step in the right direction and a big move from the zero lending targets that have been in place for the last 3 quarters.

Unlike Halifax, Sol bank like many others are looking for no growth this year and are only lending monies released by redemptions or ECO funds supplied by Spanish Government for small businesses. Sol bank is part of the Sabadell Group has now also integrated policy across all brand names and wants to end 2009 with the same level of Spanish mortgage balances as they started the year with. As part of their new integrated policy, strategy may be slightly different from region to region but no longer from brand to brand as was the case previously.

Many other banks have a similar strategy for 2009 so the best month to apply for a mortgage is the month after the banks have had redemptions on existing loans. It would be very helpful if the banks were more forthcoming about funds available on a month-by-month basis. For those of us old enough to remember this is like going back to the bad old days of mortgage quotas something none of us ever thought we would see again.

Most banks in Spain continue to adopt the practice of trying to insist on costly add on products like life insurance being linked to an approval or interest rate; even if the add on product is not required by the client. Whilst it is not legal in Spain to insist on compulsory products outside buildings insurance and bank account, it is difficult to prevent as the bank can reject applications with no rationale required so consumers are being in reality blackmailed into taking them.

Whilst appreciating the current difficulties for banks on liquidity and default rates it is difficult to justify the practices currently being adopted. Increased margins sit with the loan for the lifetime of the loan whether underlying indexes increase or not and so do compulsory products. Whilst consumers are happy at present to pay these this is only because the base rate is so low. The banks appear to be using the difficult situation to ensure future profits after the credit crisis has disappeared are maintained at unreasonably high levels and yet again the consumer is the one paying for it.

One can but hope this does not become a catch 22 situation where consumers stop buying as they realise they are being tied into potentially costly long term funding products. The impact of this would be to slow down the economy further across Europe and add to the crisis rather than help resolve it.

Given it is a common view the banks caused much of the crisis affecting everyone governments only seem to be focussing on regulation relating to bonus payments to executives and risky investment in intangible products. Behind this, no one seems to be noticing how banks are reverting to style and using lending requirements to ensure other bank products whether right for client or required are sold.

On a more positive note monthly Euribor figures suggest the market expects ECB base rate to fall to 1% in the short term. Current monthly Euribor is at 1.01%. The 12-month Euribor however remains above 1.70% and is now dropping at a much lower pace than previously experienced.

Another Spanish Bank in Trouble? Latest Spanish Mortgage News. is a post from: Spanish Mortgages Experts International Mortgage Solutions

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Should you require extra funds or need to move to interest only then re-mortgaging can help you achieve these objectives. All loans are trackers and most loans are also linked to an annual review so if you move loan while Euribor rates are dropping you may link yourself currently into a lower total rate but in fact have overall terms that are worse than your current lender. It is the margin above the relevant Euribor that is important for you to consider not the current overall rate being quoted.

There are two ways of moving your mortgage.

One is to subrogate or transfer existing loan to a new lender. Not all lenders will subrogate but if they do you will have to meet and follow the laid down procedure as per the government legislation of 2006. Subrogation has the benefit of reducing significantly the cost of moving by avoiding mortgage deed tax a cost that is applicable on all new loans in Spain and equates to 1.8% of lending.

To avoid this tax the new lender must offer improved interest rate or an extended term and then via the notary your existing bank must be given 20 days to match the new terms or release you. Movement of the loan to interest only, extra cash out or any other features being provided do not constitute reasons for subrogation being allowed  and therefore the mortgage deed tax saving. Your existing bank can match interest rate but refuse to meet any other features to force the subrogation process to be stopped. Whilst you save on mortgage deed tax all other normal costs of a mortgage would apply. These will include a valuation fee, a bank arrangement fee and notary and land registry costs. These will total around 2% of your loan amount and will have to be covered by you or added to loan if loan to values allow.

The second means of re-mortgaging is straight forward closure of one loan and instigation of a new one. In this instance you have no government process to follow and are free to leave your existing lender at will but all costs of moving the mortgage including mortgage deed tax will apply. In total these costs will be around 4% of lending and include all the costs above and mortgage deed tax.

At lower loan to values from 60% to 65% there are a couple of banks that will either assist with costs of moving loan by providing a cash back at completion or in one instance fully cover costs of subrogation.

These two lenders provide the only true cost effective route to re-mortgaging and both provide interest only facilities and the possibility of taking out extra cash within their loan to value maximums. The cash back lender only provides extra funds for improvements to the holiday home in Spain and does not allow the property to be let out. Both lenders will tie you in for 5 years and any costs covered will be repayable to bank if redeemed before 5 years. After this point both lenders are redemption penalty free.

All lenders in Spain require full income documentation no self certified loans are currently available and no buy to let mortgages exist.

If borrowers are experiencing payment difficulties or your loan to values are above 65% we would strongly advise you speak to your existing lender about your situation rather than apply for a re-mortgage.

Beware any brokers that do not explain the costs associated with re-mortgages as they are unavoidable and in the final analysis will be deducted from loan amount at completion.

Remortgaging In Spain is a post from: Spanish Mortgages Experts International Mortgage Solutions

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