Why Use A Mortgage Broker in Spain
Sourcing a mortgage in Spain can be a long and difficult process especially if there is a language problem. Using a mortgage broker will make life easier for you as the broker will already have relationships with all the local banks and will be aware of the different policies the banks have in place. This will enable the broker to deal with the bank who can offer the best mortgage to fit your needs.
Homes In Mallorca’s Mortgage Brokers have Spanish mortgage underwriting experience we will be able to gather all the paperwork the bank will need to see and to assess your affordability in advance of the application being submitted. This makes sure there are no nasty surprises further on down the line.
In short, Homes In Mallorca’s Mortgage Brokers will guide you through the whole process making sure you understand the procedure every step of the way in a language you understand. We will make sure that you are aware of all the key stages of the mortgage and fully understand what is needed. We also offer exceptional customer service which should take the legwork and the worry off your shoulders. We are well aware that you are buying a dream here in Spain and through Homes In Mallorca we want to help you make that dream come true.
Mortgages in Spain
There are big differences in the costs and terms of Spanish mortgages on offer and although the interest charged on all Spanish mortgages is calculated from the European Central Bank base rate (Euribor) the lenders in Spain are free to set the charges and terms they offer. This means that not only do Spanish mortgages vary from bank to bank, they can also vary within the same bank from branch to branch. This means you need to shop around and where a good professional mortgage broker can make your life easier.
The mortgage offer you receive will depend on your financial situation and affordability. They will need to know of any existing debt and will calculate this against your net income. They will take into account whether the property will be a holiday home or the main residence – a holiday home being riskier than the main residence. It is unlikely you will be offered more than 70% Loan To Value as a nonresident with a term of possibly 30 years or until your 70th birthday.
If you are considering buying in Spain and need finance to do this then you should start the ball rolling sooner rather than later. If you fall in love with your dream home and later down the line discover you do not fit the criteria of the banks then you are going to be very disappointed. It is safer to check out your eligibility early on in the process to avoid heartache later. Once you have assessed your finances then you can decide on the price range of the property you can afford. This is where a mortgage broker is invaluable. Also to have a mortgage in place reduces the risk of losing the property you have set your heart on and means less anxiety and pressure when you putting in your offer.
One more thing to remember is that buying in Spain is not cheap and you will need to budget between 13% and 15% of the purchase price to cover all your costs.
Re-Mortgaging in Spain
To re-mortgage in Spain is, as anywhere else, to change the basic terms of your mortgage. In order to change one or a combination of the conditions there are two basic formulas available:
1. Subrogation is when a new bank bids for your mortgage by improving the conditions so that the current lender does not want to match those conditions and therefore releases you to another bank. If your existing lender is happy to match the new bank’s offer then they do not have to let you go. Whichever way this goes you get a better deal. This will incur costs whichever way it goes.
2. Cancellation of current mortgage and the opening of a new mortgage will be a more expensive way forward as there will be more costs involved than with a subrogation. Banks will only consider a new mortgage after an in-depth study of your finances.