80% Mortgage LTV?

Hi all,

Last year we applied for a mortgage through a broker with Lloyds TSB and managed to get an offer of 70%LTV. Unfortunately the valuation came in low and we were left without enough to complete. We then tried to subrogate the builders mortgage because the original valuation would stand so we would be able to borrow more. We got knocked back part way through the application. Our solicitor has now provided details of a broker who 'can help in these situations'. We have contacted the broker who claims he can get us a mortgage at 80% LTV. Is this realistic or is it possible there will be a million and one clauses that come with it such as life insurance and fostering endangered bears? Has anybody else achieved this recently (the high LTV not fostering bears)?

Try sending a Pm to Smiley on the general forum or transfer your post to there.

He is a mortgage broker in Spain & provides excellent information.

Noreen

Think you will struggle to get 80% but good luck if you can find it , Lloyds do offshore via jersey I think ?

We had 3 offers made and withdrawn at varying LTV factoors  - now confirmed at 60% - "Smiley" is Patrick Robinson who has sorted us out and he is excellent and recommnended

 You can reach him as above

Mark

We would also like to recommend Patrick.  We are due to complete any day now ( Block 2 penthouses), and couldn't have managed without him. He is very professional, knows his stuff and always responds to any e mails the same day. We have complete faith in him.

Cherrie and Nigel

Unfortunately my experience of Patrick was not so good.  I did have good contact with him initially but, despite several emails over the course of a few weeks he failed to return the correspondence??  Perhaps he was on holiday?  Anyway, I ended up going to Stefan Onsmark at mortgage4spain and he was brilliant.  He is German (I think and ultra fast at getting back to you with an offer).  It is probably worth getting in touch with both of them as Patrick certainly did seem to know his stuff when I spoke to him in the first place.

I agree that Stefan Onsmark is superb. We finally got our mortgage through him & he was excellent at replying to emails promptly.

I have no experience of dealing directly with Patrick (Smiley) but I do know that he receives a lot of good "press" on the general forum.

Noreen

When we completed last October, we had a mortgage panic, and the broker we used did something creative I would suggest.  It cost us Euro 1600 for the service, and he delivered a mortgage in the end at 70% LTV, albeit a low valuation (Euro 118k).

On reflection, I am not convinced if this was actually Euro 1600 well spent, but I was beginning to panic, and was at the stage where I was prepared to pay this price just to get the mortgage completed.  I had already postponed my agreed completion date once.

From my dealings, I think 80% LTVs are a thing of the past.  Might be temporary mind you.

Wish you good luck and I sympathise with the stress I am sure you are going through

Martin

Our original Lloyds offer was from using Patrick. As many people have mentioned he is very helpful and professional and I believe he got us the best deal available, hence why I'm dubious about claims from this other broker about 80% LTV.

Hi All,

I can definately confirm that the maximum you will get is 70% LTV. 80% is now very much a thing of the past!  Even at 70% - and there only a few lenders offering this - there are some lenders imposing horrendous margins over Euribor  e.g. 1.75 up to 2.4!!! It is possible to get between 1-1.4 at 70%, depending on client criteria..

Thanks everyone, I guess it's back to the drawing board.

Regarding Lloyds doing their mortgages via Jersey - I would be very careful not to take a mortgage from a non-spanish location at present if borrowing in Euros.  There is a real risk that Spain will drop the Euro and revert to Psetas, in which case you want to make sure your mortgage reverts also.  It sounds like the spanish economy is really suffering at present (13.5% unemployment) and no control over their interest rates or ability to print money. 

I think they are looking at the way the UK has cut rates and devalued the pound to mitigate this recession and see the benefit they would also get from that.

If Spain ditches the Euro and reverts back to the Peseta I'll eat my hat, and my underpants.

Absolutely no chance of that happening, I'm afraid.

This week Spain, Portugal, Ireland and Greece have all been put on downgrade watch by ratings agencies.  These countries are all basket cases right now (much like the UK).  If these countries still had their own currencies right now they would be depreciating rapidly - this would be a good thing - the countries debt (denominated in their national currency) would also depreciate and recovery would come sooner.

Essentially relative purchasing power in these countries has risen too high over the last decade.  Think back ten years to how many pesetas you were getting to the pound and how cheap your spanish holiday was compared to now.  If the Peseta still existed you would be getting that and more.  Also think what we are currently being quoted for simple work / furniture in spain right now (in £'s equivalent), its off the chart - this from a basket case country with 13.5% unemployment.  There is a major correction in relative spainish/english earnings coming.

This needs to be corrected by a period of wage growth slower than inflation, however as we are currently going into a period of zero inflation / deflation this would mean notional wage decreases (annual paycuts) which would be completely unpaletable for individuals/unions.  Therefore spain needs inflation to get out of this mess (ie zero wage growth but goods and services increase in price hence relative purchasing power decreases), the normal way to do this is to cut interest rates to 0, and print money.  However they currently, as part of the Euro, have no control over this.  

Were the ECB to go for this option to help its basket cases most of the inflation would fall on Germany which would be unacceptable to them.

I think its odds on at least one of the four problem countries ditches the euro - if that one happens to be spain the last thing you want is a Peseta denominated asset (with a rapidly depreciating currency) and a Euro (which would appreciate even further) mortgage.  This is essentially the postion a lot of Icelandic people find themselves in right now.

Tell you what, I'll bet you a pint that this time next year Spain and all the other countries you mentioned will still have the Euro.  :)

I'm sure you are right - my point is there is a chance that they won't - I saw financial spreadbetting odds of 3-1 that one of them would drop it this year. 

It's unlikely and even more unlikely that it is spain.  My point is, it could happen, and the consequences if it does and you are stuck with a euro mortgage are bad.

Wayne

PS I'll buy you a beer this time next year anyway!

Cheers Wayne, I'll hold you to that, and if I can find a crowbar to open my wallet I'll be happy to buy you one back. :)