Due to Complete and at a loss to know which way to turn

Would be grateful for some advice.  I've been trying to read through everything but time is running out and I'm not even sure I can get a mortgage arranged before completion now which is due on March 27th.  Just don't know which way to turn.  Bought off plan two years ago from Polaris World.  We had a small amount of money to invest which was to help towards a pension.  Everything looked rosey in 2005.  The idea was to hold on to the property for a few years and rent out then sell.  Gone through lots of options on mortgages but really not sure what the best option would be.  Didn't realise there would be a redemption fee.  Been trying to find a product without but there doesn't seem to be anything around now with interest only option and no redemption fee.  Only have a few days now to say if we want to go with the Builder's Mortgage option.  Do I still have time?  Was originally told only needed to add on 10% to purchase price or property but finding it all a lot more expensive.   Already have a flexible mortgage in UK but as the £ is not good against the euro fear it will be a bad move.  Also will loose out on Spanish Tax allowance, I think. Please can someone help before I sink!!!!

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It is certainly not a good time to be a buyer. Banks are withdrawing products and as you say, the Euro is pants at the moment. The big question is, how much deposit have you put down? The next is can you afford to walk away?

Have you contacted the financial people on the forum? Smiley has been able to place some difficult cases in the past, not sure how any of them are doing now. I think you will find most mortgages have a redemption penalty clause of between 3- 5 years, ours certainly has. Noreen (from the forum) completed last year with the builders mortgage at the last minute. She had a mortgage sorted with another bank and found the set up costs were much lower as there is no valuation and no stamp duty on the mortgage.

If you use money from your UK mortgage, you will be deemed to own the property and the wealth tax will be paid on the full value, whereas if you have a mortgage, you will only be taxed on what you own and not on the borrowed amount.

I don't envy your position and wish you well with your decision.

Mark

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To avoid boring everyone with my story yet again, I will Pm you with some information.

Regards

Noreen

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In my case, I was also so reluctant even look at builder's mortgage because I just logically thought it cannot be good. Then, due to various reasons, time running out and we had a look of it - it actually is not bad at all. Rate is competitive and set up fee is cheaper than other banks. Builder's mortgage bank is so willingly lend to you since they already funded development. So, talk to your builer's mortgage bank it cannot be hurt.

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Hi Mastech

It must be awful for you, I feel for you. Good luck, keep us informed.

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Subject to status long term interest only and nil redemption penalties are possible. There are also products that permit partial redemption penalty free (for overpayments) but a lot depends on how much you wish to borrow and what you are specifically looking for and your status (income, ages, current liabilities etc.). The developers mortgage will save you money on start up costs but generally speaking they are quite inflexible beasts and will merely cover the remaining amount outstanding to the developer. Best advice dictates the developers mortgage should be considered as an option owing to the reduced start up charges but ensure it satisfies requirements in the long term as well. Remortgage here as others will tell you can be an extremely costly process and by no means straightforward.

Hope that helps and good wishes for whatever you do.

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Mastech,

Sorry to hear of your dilema and totally agree that developers mortgage is best option, where possible. Having had a lot of dealings with Polaris World clients, just be aware of their management fee in relation to 'arranging the mortgage'. Also budget for approx 13% over property price, when using a mortgage to purchase.

   

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Hi
CAM have been pretty good at listing all the fees and details, which I have found very helpful.  There is no mention of management fee though.  Do you have any experience of being charged this?  Be grateful for further info and how to stop this from happening.
Thanks.

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Hi Mastech

Edited to add : Sorry, just realised I was going on about another charge . Apologies, losing the plot here.

This message was last edited by morerosado on 3/1/2008.

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