Which mortgage conditions to chose

Hi,

We've been offered  the following terms for our 80% mortgage:

Barclays      Euribor+0.75

UCI      5.6% for initial 6 mths then IRPH +0.5

These two are the only insitutions offering us a mortgage . We are sightly confused and can't make up our minds on which one to choose,  any advice would be greatly appreciated.

Thanks

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IRPH is the Spanish equivalent of SVR and currently 5.45% - thus pay rate would be 6.25% assuming you would be at the end of the 6 month introductroy period - be very careful of UCI they are sometimes very, very lacking in transparency in the terms if their mortgage products. Also be careful about compulsory life assurance cover - all banks will sometimes spring it as a last minute surprise on clients at the Notary. Unlike the UK lenders here are not required to be transparent hence they tell you pay rate is x for the first six months and afterwards it goes to the relevant benchmark plus margin - whichever one they are using!! 

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Thanks Smiley for your advice.

I'm probably better going to Barclays, are the conditions I've offered reasonable?

Thanks

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Up to you methinks Mel but in my view better than UCI but have replied specifically to your PM

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Hi Mel,

I have also been offered the same rate from Barclays.
The thing is, I'm not convinced the rate is much better than a rate we can get in the UK.

If there isn't much in it, then why not just get an advance on my existing mortgage? Halifax, my existing UK mortgage provider are happy to give me the money but will charge a one-off fee of £299


AJ

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The debt will be charged on your UK property and not the property in Spain - no problem there at all and simply depends where you want to hold the mortgage I guess. Long term your tax situation MAY be better by having the mortgage on the property in Spain but dont know your exact circumstances or long/short  term plans. Historically rates have been lower in the Eurozone and in my view likely to stay that way - margin has closed since NOvember 2005 but think easing will be quicker in Eurozone than in UK - my opinion only!! 

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Will Barclays insist you have an account with them for the mortgage payments? We have a Barclays current account as my Wife is a staff member, so we get a discount on the maintenance fees, but be aware that you will be charged 15€ each every 6 months for the non residency certificate. We are in the process of looking for another bank before our next 6 months comes up and we are charged again

MArk

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Why don't you re-mortgage with ING .  We have done that . We tried Halifax ( our original lender ) and their costs and set -up fees were ridiculous     ING charge no set up fees and it is all done over the Internet . It just took a few days really and once it has been accepted , you give them 3 working days and they will pay into your account .   Easy and excellent service .  Have a look at their website .

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Hi Mark if you have a Barclays Hispania mortgage then they will insist on a current account with them I am afraid.

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Hello

yes, it is true The market for mortgages can confuse you. You always should ask for good advise and to to the bank you have a good feeling. At the end is not only the rate who gives a decission for this. Important as well is: Can i put some extra money in, how long can i pay only interest, how flexible I am with the bank. I have good experience with the Solbank, Torrevieja. They are always very friendly. Generally have a look to the internet and search for the actual Euribor rate and exchange courses.

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Why dont you pm Smiley - he is the financial whizz on the forum. Are you direct to the banks or through a broker??

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Hi everyone, I am buying in Spain and been offered a mortgage, the set up fees seem steep, can anyone comment ? 1.5% opening fee (of the borrowed amount).

Cheers

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We completed in October & our mortgage opening fee was the same - 1.5%

Noreen

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We paid 1% set up fees on our mortgage, but wouldn't recommend them.

Mark

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I think 1.5% is steep,  1% is average, but some banks charge as low as 0.5%!!!

 

 

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Depends on the lender but as Sharon says 1% is generally the norm - there are some out there that do charge a higher opening commission but a great deal depends on the lender and your particular status as to which lender the application can be placed with. Some of the lenders also charge a MIG premium in conjunction with their opening commission (large loan guarantee). One of our lender partners also took advantage of credit crunch to raise the margin above Euribor and also their opening commission. One of the consequences of credit crunch is also that SOME lenders are starting to try and insist on their own life assurance  be set  up alongside the mortgage - apparently as it is now more costly for them to borrow money margins are being squeezed so it is another way of them getting revenue - personally i think it is simply an excuse. What really pisses me off though is that they do things like this with no prior warning -  have had two clients complete recently (under time constraints so not a lot of time to argue the toss) - the first wanted a life premium of 1200€ per annum (we managed to get this reduced to 400€ - think if we had had more time we would have got it removed completely but the developer was threatening penalties) they didnt inform us but advised the lawyer 4 days prior to completion - bastards!! The second scenario - different lender - we managed to get it removed entirely but we had more time to make the incessant arguments against it but it irritates the crap out of me that they will do it.

Work this one out  Solbank introduced their 90% product last year to a blaze of publicity - we have had trouble with a couple of applications on this specific product and clients seem to fit well in our view in every aspect - and confirmed by Solbank also that they fit - we have however had one or two problems - not with the bank generally, just on this particular product - it appears that they dont really want to lend at 90% of value and it is just a hook to get people through the door - apparently they say they make no money out of their 90% product - hmmmmmm on the basis that the chargeable rate is basically no different to their other products I wonder how that works - if they lend 100.000 at the same rate at which they lend 90.000 how is it that the 90k makes them money but the 100k does not!!!!! Perhaps its Spanish logic!!!!!

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Smiley,

That is very interesting what you said about Solbank and does not surprise me!  Although we have this product as an option, (they told me from the beginning that they would not exceed 100% of escritura price!) have not actively promoted it as really unsure of it's integrity! Especially after having a meeting with a local branch manager re this very thing and he was extremely cagey and seemed to me he was making up answers to questions as he went along!  But I am glad you have posted and 'exposed' the product. Solbank should not be encouraging people then not seeing through!

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Agreed and it would never go above 100% of escritura - we didnt like it very much owing to high opening commission and have only placed a couple of very needy clients on it - but to be honest its really a lot more trouble than its worth - bit like Barclays 10 year interest only - advertised and promoted strongly but no integrity - very apt choice of word!! Interesting your observation on the branch manager making it up as he went along - so often bloody BDMs dont have all the facts - you ask a question and get a very vague response - they never seem to want to say - I dont know but I will find out and get back to you - they seem to want you to find out by making the application and finding out by your mistakes - thankfully not all of them like that but vast majority dont seem to like the idea that you think about the advice that you are giving and want to make sure clients are informed so you ensure your product knowledge in advance - its even worse when you have told a client one thing and a gestor at Notary states the exact opposite but the bank themselves will confirm what you the broker have said in the first place as being true - nonetheless the bank arent present at Notary and it can then cause all types of histrionics until confirmation of what you have said can be obtained ----- grrrrrrrrrrrrrrrrrrrrrrrrrrrrrr!!!!!!! Sorry but needed a rant!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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Hahaha!!! Glad you got that off your chest!  I can see you were typing as you were thinking, 100 miles ph!! I can relate to that, it is so me!!  And could not agree more, don't get me started on BDM's!!!  

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Probly nuff said on that score - thank God its another day closer to the weekend!!

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