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Since
the introduction of the euro in 2000, mortgages in Spain have
become more easier to obtain. The banks and financial entities
are realising that the increasing need for property finance created by
the boom in property demand cannot be held up much longer and is rapidly catching up with Northern Europe. Spanish
banks are now beginning to release credit on interest only
options, longer repayment terms, as well as equity release
schemes. Rates and terms are amongst the best in Europe at the
moment.
We
recommend that before you start to look for your property, come
and have a chat with our recommended mortgage broker for a quote
on how much you can borrow, what the repayment costs would be,
and what price range and how big a deposit you would require.
With this information, you can go out and find the right
property, with the peace of mind of knowing what you can
realistically afford and that the funds, costs, etc, have all
been pre-calculated. It is important to know that when
purchasing your property with finance, that the sales
agreement should have a clause stating the purchase is subject
to 'mortgage approval', giving a specified date.
In the event that the property deal does not go through or the
mortgage is not approved, you will not loose your full deposit.
Today there is an increasing range of
mortgage products available on the market and our broker will
be able to advise you of the one that best suits your
circumstances and budget. Spanish mortgages can be arranged to buy a new or
resale property, for renovation of an existing property, or for
the construction of a new property.
What
is needed is a copy of the Nota Simple from the Land
Registry for the property you want to buy, and a copy of your
reservation or private purchase contract. The application
process can take any where between two to four weeks from the
moment your provider receives a completed application form and
all supporting documentation.
Interest rates
Most
mortgages interest rates are usually indexed to the Euribor
(Euribor is determined by the (EBF)
each day) and the banks currently charge an extra 0.5% to 1.25%.
A variable rate mortgage therefore tracks the Euribor index.
Before a fixed rate mortgage would mean repaying at a higher rate than the
current variable rate, with an interest that is fixed for the
period of the mortgage, but new legistlation has provided the
ability to change from a fixed to a variable rate and visa versa
during the term of the mortgage ( this will depend on the
borrower)
Costs
The
costs for arranging and setting up your mortgage will vary, generally, the more
complex the case the higher the fee. Typically the fees would be between 1% and 2% of the amount
borrowed.
Mortgage
rates forecast
Interest
rates will inevitably fluctuate over the coming years, and the (AHE)
has warned that rates will go up sometime over the next few years.
Historically interest rates for
mortgages in Spain have fallen from 16,72% in 1990 to the all
time low of 2.057% in mid 2005. This will of course have a direct effect
on the amounts people will have to repay back. Under the
circumstances it could be worth considering taking on a fixed
mortgage rate scheme.
Calculate your mortgage payments
For a
FREE consultation call Tel: 34
952818655 or
Let Us Call You.....
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