Mortgages

Hi All,

Has anyone any advice regarding mortgages? Is the Builders Mortgage the way to go or are you better to source one yourself?

Cheers,

Gina

Hi Gina,

If you know the conditions of the product that the developer is offering and these are acceptable to you then it would be worthwhile subrogating the builders mortgage. By doing this fees and taxes are lower, e.g. there is no valuation fee, no stamp duty to pay on the loan amount, notary and registry fees are halved and instead of paying the bank opening fee there is the subrogation fee to pay and this is a difference of 0.5% (normally bank commission is generally 1%).

I would also advise you look into alternative products, for comparison to ensure you get the right product for you, as should you decide to change your mortgage in the furture, re mortgaging costs are very expensive, around 5-6%.

Does anyone have details of the developer's mortgage? I did ask for further information 12 weeks ago, but never heard back.

Thanks.

Ash

Hello Gina,

We used La Caixa for Roda and it worked out very well.

The local Bank Manager  in their new branch beside Roda spoke perfect english and has a very good understanding of the UK market as he worked in La Manga Club for many years,we also find their internet banking excellent.

As we have  a property to complete in Corvera I was talking to him today about it and he said that La Caixa are definatly in the market to provide mortgages in Corvera also as they consider it a very good development.

The managers name is Leo Gutierrez 0034 968 549 950  -  690 220 798.

Hope this helps .

I've had an illustration from The Mortgage Service Group it seems like a good offer (thanks Sharon for quick turnaround). I wanted to compare it with developers mortgage - anyone done any digging around with their offer?

M.

Hi M, haven't done any digging around with the Developer's mortgage as we thought the rate was much too high.  I've decided to go through a mortgage broker instead.  Let you know when I have some figures.  Out of interest what deal was the Mortgage Service Group offering?

Regards, Anita.

Anita I've pm'ed you

Exerpt taken from informernews.org

Banks Make it Harder:
Just as banks are being given the hard word from the government to issue new mortgages they are now moving the goal posts and making it more expensive to get a mortgage. Many Spanish banks are now reportedly asking for more than just proof of a stable income to grant a mortgage; they now require purchasers to take out an insurance policy to cover them against any future unemployment and another life insurance policy. These new requirements come at a cost of approximately €1000. Complaints are now flooding in to consumer rights organisations, which have vowed to look into the legality of these new requirements.

I have just been informed that some of the banks in Spain are misleading clients and potential clients regarding the interest rates on new mortgages.
Please beware, this is very important, particularly if you are considering taking over the builders mortgages.
It's in the small print and their initial promise of a "good deal" is not really as stated, new borrowers should be aware that the banks are applying a "minimum rate" into the deal.
For example, the mortgage offer comes out at Euribor + 0.75% looks good, 12 month Euribor today is 1.85% + 0.75% as stated, total 2.6%, sounds great huh? NO, because it is subject to a minimum rate of 4.75%!!! So Euribor + 0.75% does not exist unless Euribor rate is 4% Not such a great deal! 
Please get your broker or your solicitor to look at the SMALL PRINT.
Please be careful!!

I got this information from my mortgage broker at La Vida Mortgages, Henry Slade, he is at henry@spanishmortgages.org.uk

Regarding the post below, would just like to say, I have been in contact with Henry at La Vida Mortgages over the last couple of weeks, and constantly over the last few days regarding our mortgage.  He has come up with a very competitive offer.  Also very patient with my limited understanding of Spanish mortgages.  If you are starting to think about your mortgage and need a broker, give him a go.

Regards, Anita.

Haven't looked into this yet, but this may be a way forward for many people who have a shortfall due to the exchange rate.  This would be a huge saving on the purchase price.

http://www.spanishpropertyinsight.com/buff/2009/03/santander-bank-agrees-to-offer-100-percent-financing-if-developers-drop-prices-by-20-percent/

Dear All,

I have used here in Spain Banco Santander I have a contact here if anyone wants one she is also a English Manager working for them if you want further information send me a private message

Regards

Andrew

Hi all

Has anyone received details of the developers mortgage from Corvera and what the rates/ LTV are ?

What about bank valuations also - have these started to filter through ?

Please find below main points of CAM Deveklopers Mortgage as explained to me.

• Initial interest = 4.50%.
• Term: up to 30 years 2 years interest only payments included in the total length or capital and interest repayments from scratch.
• 1st revision of the interest: 12 months after completion date taking into consideration EURIBOR + 1,25 (it would be reduced if you contract some products with us, find enclosed document called "how to get a better interest"). Then, revisions every year taking into consideration EURIBOR + 1,25 (it would be reduced if you contract some products with us).
• Early redemption charge: 0.50% first five years and 0.25% after the fifth year.
• CAM bank fees: 1% for the first mortgage
• Survey cost: 0€
• HOME AND LIFE or MORTGAGE  INSURANCES COMPULSORY WITH CAM BANK

Just a couple of comments form the posting re the mortgage which seems high compared to the market rates in Spain

First of all this doesn´t mention the precentage of the LTV the problem being that most banks offering reasonable rates will only loan 60% of valuation

Halifax are 1.25% over Euribor with an option of monthly, quarterly, half year or annual reviews, you choose

The cost 1%, no early redemption fee but 0.5% in the first year if move to another bank

Interest only up to 5 years on 30 year term

Most banks will tell you that you need to take their insurance but legally you can get your insurance elsewhere providing you can prove that you have insurance which I did with the Halifax

Hi Roy,

As far as I am aware Cam are offering between 60%-70% lower of purchase price / valuation (plus I have seen + 1.4 over annual Euribor!).

I am not sure when you completed with the Halifax but I do know that they are currently offering monthly Euribor + 1.3 (2.51%) for Repayment and monthly Euribor + 1.4 (2.61%) for Interest Only (max term 5 years).  Their basis is 60% of the lower of purchase price or valuation and max term is 40 years (to age 70).  

Halifax do not have any Life Assurance requirement full stop and although illegal most lenders are now insisting on your taking their product if you want their mortgage!!!

As you can imagine (at these rates) I am quite busy with the halifax!!

I actually completed on a property last week with them and it only took a couple of weeks to arrange as I just walked into a branch but they would still only offer 60% to a resident

It was easier for me than a non-resident as I work in Spain and have proof of earnings

They did initally insist on their insurance but my lawyer put them right and they accepted my existing life and building cover which was much less expensive than their offer

Congratulations on your completion!!!

Maybe, just maybe you got a slightly better margin because you are resident!  But I am very surprised about the Life Assurance because they have never brought it up and indeed their BDM stated this was not required!  Again maybe because you are resident?

The big problem here is getting 'like for like' quotes.

Some banks here will offer low opening fees, lowish rates but then hit you with compulsory insurances and in the end it adds up to more than you could have paid elsewhere.

Some work off the 1 month Euribor (Halifax) and so vary every month, some the 3 month Euribor, most work off the 12 month Euribor and RBS even use the 3 month Euro Libor with a discount for 2 years!

It is a maze making sure that our clients get the best deals!

If the property gets a good valuation, i.e 10% more than the purchase price, it is still possible to get close to  80% lending.

I.e. PP = €200,000 but value is €220,000 we can still get 70% of the €220,000 (€154,000) which is 77% lending.

The bank in question charges from E+ 1.5% but has NO conditional sale insurances.

hello,

has anyone got a recent quote? what about valuation? the developer's bank is valuating the property almost at purchase price, i'm interested to know what other lenders are valuating it at?

thx

sam