Katherine Walkerdine from Mortgage Direct wrote this blog for us.
Mortgage Direct have recently met with the head of collaborators for one of the top banks in Spain and it was encouraging to hear that not a single one of Mortgage Direct’s client’s with the bank have defaulted on their repayments, which gains them huge credibility with the bank. Coupled with the levels and quality of business they give them, they are now able to offer exclusive interest rates as low as Euribor +1,5% for non-residents (depending on the client’s profile).
Valuations
As you know, valuations are key when clients are taking out a mortgage. Last week, Mortgage Direct met one of the senior regional heads of TINSA. They are well-known for giving higher valuations, but not all banks will accept them. They have a special agreement with one of the main lenders that allows them to request valuations from TINSA for selected clients, when they feel it is necessary. They will then use this valuation for the mortgage, as a special favour.
Buying through a company
Clients often ask about buying a property through a company they own or through a new company. Nowadays, banks usually only like to lend if the property purchase is through a Spanish S.L. company. There are tax advantages involved but it is important to note that the interest rates and maximum loan amounts are not as competitive as for normal mortgages and clients will have to submit quarterly tax returns to the tax authorities.
Sterling mortgages
Mortgage Direct has a meeting recently to collaborate with a bank offering Sterling (GBP) mortgages to UK residents buying in Spain with the loan secured against the Spanish property. The interest rate would be variable and based on the Bank of England base rate (currently 0,5%). The margin is around 2,0 – 2,5%, so the rate would be between 2,5% – 3,0% in total. The maximum borrowing is 60% and the bank opening commission is 1,5%. Terms up to 20 years. Some clients prefer to have mortgage repayments in GBP, so that no matter what happens with the GBP/EUR exchange rate, they still pay the same amount in GBP each month. There are arguments for and against having a GBP mortgage on a Spanish property, so it is good that they can now give our clients both options.
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