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Hi all hoping for some advice please. We have got an offer through our estate agent for a mortgage but I am not sure about it all, can anyone either put my mind at ease that all of it is usual or the opposite! the details of the mortgage are:
we paid 1000 euro deposit, the house is 39,000 and we are getting the following offer from a bank in Madrid-
mortgage over 25 years 48,000 euros
Bank fees 6,000 euros
New valuation ,150 euros
So you will have 42,000 euros
House price 39,000 euros
minus deposit paid 1,000 euros
you are left with 3,850 euros to pay tax of 8% and fees which will be as follows;
The Bank wishes to declare 60,000 euros on the DEEDs as they cannot be seen to lend 100% mortgage. Below are fees:
8% tax on 60,000 euros is 4,800
Notary fees 300
Registration fees 300
Lawyer 900
As you will have 3,850 euros you will only need another 2,450 euros.
However you will have 30 days to pay this fees after the sale has completed.
Does all of this sound normal? the bank fees seem high and I am concerned about declaring the property as a higher value - will this affect our property taxes in the future?
Hoping for some advice, this has been going on for around a year now, we originally found a country property and a bank said yes provisionally, then pulled out. The banks said find a town or village property so we did then the bank which said yes changed their mind and now this one has made us an offer. If we do not take this one we most likely will not get another mortgage as we have tried most banks now but I am very concerned about this offer......! Thanks in advance!
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This is happening all the while now.
You are basically paying the bank the rather large fees to "cook the books".
I guarantee you that some of,if not all of the 6,000 bank fees are broker fees.
Most banks are offering these deals as they know that if you want the property and a mortgage through them,you have little choice.
If you feel that you are getting a good deal with all the added extras then go ahead, if not, unless you have capital,you may be in a corner.
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www.taylorlandandpropertygroup.co.uk
still here after all these years!
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Hiya thank you for replying, I queried this with our estate agent and she says it is because the bank is in Madrid which is quite a way from where we are purchasing (el hijate) and this is covering their travelling expenses - I'm not convinced by that myself! Yes I have a feeling these 6000 euros are mostly brokers fees which should be explained honestly to us. I don't think we will go for this mortgage, rather gutted to be honest as that means we have a long time saving instead of having a long time to do the house up! Does anyone know of any banks which are lending at the moment which we can try?
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The amount quoted as bank fees is extremely excessive, normally a bank would charge 1-2% of the value of the mortgage, which in your case should be around 800 euro to 1,400 euro maximum. I would suggest that you find an independent Lawyer, and if you can't deal directly with the bank to sort out the mortgage, an independent Broker too.
The Estate Agent is obviously receiving a commission for the sale, could that be included in the, so called "Bank Fees"? I would ask for a breakdown of the 6,000 euros to find out exactly what it is for.
You really need indepenfdent advice from somewhere, don't rely on the Estate Agent only, as they have their own interests at heart.
_______________________
Marbella Solicitors
Manilva Solicitors
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Hi thank you for your reply, yes that is what I thought too, my suspicions are that the estate agent has included broker fees in the 6000 as they mentioned a 'broker friend' before. I suspect that this is the case here. So sad really as we have come so far! I will ask for a full breakdown of the fees now and see what they say. Thanks!
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You cannot trust any BANKS especially SPANISH you have to way up if the property is worth the total cost to YOU dont be affraid of paying more for something you really LIKE
ALSO ask for a better deal if you are NOT HAPPY you are in the DRIVING SEAT.
They are doing you a favour by increasing the selling price as this will reduce your CAPITAL GAINS payment if you sell LATER ON ITS out and out fraud BUT that goes with the territory.
Regards Rod
This message was last edited by rod on 07/03/2012.
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Thanks Rod, we do love the house but it makes it way more expensive than it is worth, plus we wanted to have a 10-15 year mortgage as we want to pay it off then move over there, the extra 10 years makes it difficult as we would have to pay off early, not a problem until you factor in the extra expense! I think we will just have to save and hope that we can still purchase at these sort of prices in 10-15 years.....
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A WISE HEAD on YOUNG SHOULDERS ,it can turn into a HORRIBLE mess as most would AGREE on the SITE and I think you would it SOUNDS regret going ahead thinking someone took advantage of YOUR GOOD INTENT
GOOD LUCK with what ever you DECIDE
Rod
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Not sure about the young part ha ha but yes I think we would regret paying that much out in order to satisfy our goals out of impatience. Rather that we wait and make sure we get the deal we need/want. Once we have the money we will then be ahead of the game on the properties and not have to mess around with these nightmare banks!
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Hi All
i am in the process of getting mortgage quotes, i have decided to use GM legal Murcia i got a full greakdown of my expenses which came in at 10% of the cost of a 60k property.
google GM Legal and ask to speak to Guadalupe, she is very trustworthy- we are in the process of a refund from the banks and it is going great guns. we have updates everyweek and she has always been available. Plus the costsahve been over a half cheaper than others out there.
It'll cost you a phone call,
Good Luck
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The repayments on that mortage should be less than 300 euros per month over 15 years. If you were a cash buyer your total cost would be about 44000 euros as opposed to over 51500 euros using their mortgage.
You may have a problem getting a 100% mortgage from another lender though. But it does seem like a bargain. If it was offered to you at 45000 euros plus normal 10% costs would you still buy it? Changing the charges may be the bank's way of lending at 100%
What interest rate are they charging?
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Sadly, it was these types of mortgage deals that started the 2008 recession in the USA, by way of banks collapsing due to mortgage defaults. Banks had loaned 100% plus, to every man and his dog, and when they could not make the repayments, they just chucked the keys in.
Clearly, you are trying to borrow every penny involved in purchasing this property, and by doing so, everybody involved is going to take you to the cleaners. I doubt you will ever find out who has had what.
What is going on here with the bank inflating the purchase price from 39,000 to 60,000 is as a minimum bad practice, and possible fraud (however I am not a Spanish Lawyer, so not qualified to make a firm accusation) even if it is, sadly, when have the Spanish ever cared.
You have to give this whole scenario careful thought. A normal purchaser would have his/her deposit, plus funds to cover expenses and taxes. Then approach a bank for a traditional mortgage based on the true purchase price.
If you are not in a financial position to do this, why not rent like everybody else, until your finances improve. If you proceed, I think it will all end in regret.
I would be interested on what that ‘’Maria, Lawyer on EOS’’ has to say about all this.
Steve Ex owner, The Mortgage Shop, Halifax, Huddersfield, Leeds. Qualified Financial Adviser FPC3, holder of the CII Mortgage Qualification. (But I don’t know everything)
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Adding it up, you are paying 60,450 to buy a property that could be sold at 39,000 less selling costs of say 10% resulting 35,000. All that hassle to make an instant loss of 25,450! In addition there is the interest on the mortgage payments over the period of the loan. Why on earth would you want to do that? Prices generally are still dropping so its likely to get worse.
Save yourself a lot of hassle by renting, maybe even this property with an option to buy. You have the added benefit of being able to move if the neighbours become troublesome or you find friends elsewhere yand you'd like to move closer to them. You said that you wanted a place in the country, but the loans were only in the towns so you looked thare. Go live where and how you want and wait until the market changes. Remember its a personal loan that you are taking that just happens to be 'secured' by the value of the property. Even after spending all the additional costs of 21450, you cant just throw back the keys and walk away if your circumstances change. You are stuck with that loan until it is all paid off, even if you move back to the UK.
No, at present you should just rent, enjoy the sun, warmth and culture.
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All Property Matters
www.surveyspain.com
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Will they ever learn?
Obviously , 'No, not yet!'
Write to TThe Nationals (Telegraph, Guardian especially) and BBC about this...name and shame them and also denounce them for fraud!
_______________________
Christopher Gamble
Stratico and First Impression Property Services
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Hi all, we do have the 12percent of property value needed for taxes and fees, however we were unaware that the banks could demand a further 6000 euros for getting the mortgage setup! We are not going to go for it as we are lucky enough to be in a position where we can save up for it instead, not the same house ( well it maybe if the economy stays so bad!) but at the end of the day there will be more houses. It makes me cross they think we are so desperate that we would accept this mortgage!
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I just have a feeling that the title helcatamy has used for this thread, is a plea help, I think they already know they are wrong in the head even considering this fraudulent mortgage deal.
I agree with Stratico the job lot should be named and shamed. Bank, Estate Agent and Lawyer (whenever he shows is face, because one will). How do they sleep at night. There are supposed to be laws to protect vunarable people like helcatamy.
I will ask again, what does Maria the EOS Lawyer have to say. Lets be knowing.
Also Helcatamy, lets be having some names please. Bank and Estate Agent at least.
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Hiya yes I figured it was a no-go as soon as I saw it. The estate agent has been trying to get a different mortgage, I don't think she wanted to bring this one to us but had no luck elsewhere so not convinced it is all down to her although I am aware that they could be dodgy in the end!! Our original solicitor I think is dodgy and we a revoking her power of attorney when we go in April - she transferred our deposit without waiting for us to tell her to go ahead which sparked alarm bells so I removed the rest of our euros from that account and got copies of all paperwork straight away, unfortunately we can't get over til April to revoke the power which is concerning. I now just have to make sure all is stopped- any more of this type of thing and I will Name and shame all over believe me, just not until we have our deposit back-our terms were that we would have the deposit returned if we did not complete-once that is safe in my account again then I will tell who is involved!
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I would recommend you speak to the manager of the:
1126-San Fulgencio-La Marina
Pedro Maria Unanue, 1 Local 20 Urb. La Marina
SAN FULGENCIO,
966 790 389
966 790 043
Manuel the manager is an outstanding person and this is the best Bank we have ever come across in any country. I am sure he will give you sound advice
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There are several spects to this;
The fees do seem a fraction high as usually they will come in at around 10% for a property of this value. Within the fees - certain fees are fixed so the higher the property value the lower percentage they appear compared to the price of the property. The person who responded by saying that fees are broker fees is probably incorrect as set up fees are taken by the bank, and if a broker or introducer is used then they would normally pass half the fees to broker. Or they increase the set up fes to accommodate the broker - nothing wrong with this as the broker would have done the work.
All in all, the fees maybe around 1000 to high. This is the vaguest comment along with the inheritance % below that I'm going to make as I have not seen the entire make of fees as will be set out by the bank.
Spain, by it's very nature and customs is a corrupt and immoral place. Get used to it - or rent and pick up your bags when you have had enough.
So - lucky you! You have been offered effectively aa 100% mortgage. Generally these are impossible to get. At low interest rates this is a god send. Secondly, if the going gets too tough and you do not have property regestered in the UK, you could hand back the keys and walk away. ( I don't recommend this on moral grounds - but that's what people did in spain over the last few years, and the banks took the hit). Don't do this is you have a property in the uk, as the bank can pursue you for your assets if you default on the mortgage.
Lastly, in thepast values were under declared. It happened to us and I wasn't pleased or comfortable. This effectively means that when I come to sell my house (fat chance as it is illegal) I will be paying extra capital gain if I do not buy another main residence here in spain. (Most brits sell to leave as we can't get on with the country itself, family ties, or partners not settled - that is fact ) .
But you have an over declared house, so assuming you have it for a few years you can make up to 20K (approx) 60 -40 before any capital gain can be registered. When you sell at 61K you will make 1K at 18% capital gains or inheritance tax reasons - and these are a killer, (generally around 40% but depends on their relationship connecion to you - could be more could be less). They may value you this at the 60K or get it valued when you die, so that the value comes in at less, otherwise 40% on 60K is 24K they will have to trump up. You cannot rely on spain to do the reasonable thing, they will simply shrug their shoulders at your kids when they need help)
Buying abroad is frought with danger and things we do not understand. I certainly wish I hadn't bought - it's not just about the property - it's about the waysof spain. Some people I have met have been very happy, some ( simply a disproprtionate amount of people) have not and have been done over in some way - and that can effect your health.
Another thing to consider is if you do rent and you decide to buy later, you may not have the required earnings at that point to be able to get a mortgage. So possibly, this is something you need to decide now.
I am a financial adviser and an accountant, so I am telling you how it is, I am not fishing for work, but me and my family have had the bad end of the stick. I would simply rent - have no worries and complications, and place the money outside spain to generate growth and an income. And the reasons we have these forums - because generally us brits care about each other - it's in our make up.
Good luck.
.
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Do you have equity in the UK you can borrow against? This may be a cheaper option if you really think this is the place you could be happy in. That way you would be a cash buyer, and could maybe negotiate an even better deal.
_______________________
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