Virtually all TMO’s business is UK based, so cases regarding property abroad are referred to specialist advisers.
Loans are available for house purchase, or re-financing for home improvement purposes. Borrowers can choose from repayment, endowment and ISA mortgages.
There is a minimum loan size of £15,000, but it must not exceed 75% of valuation or purchase price ‘ whichever is lower. The loan is based on joint net pay and is calculated on an affordability basis. All existing liabilities together with the proposed Spanish mortgage payments must not exceed 35% of the ‘take home’ monthly income.
The current variable interest rate is around 1.50% above libor on a variable rate basis in sterling. Lower fixed or variable rates in pesetas and euros are available from 4.75% fixed for one year for 70% loans.
Borrowers should ensure they have full title to the property on completion and that the nota simple is available for the lender. This document may be needed before a valuation is carried out.
The completion takes place in front of an appointed Spanish notary and all parties to the mortgage. A power of attorney may be used to sign on a borrower’s behalf for the mortgage and land deeds. A copy of this power of attorney must be presented to the lender in good time before completion.
A Spanish bank account is required and some lenders offer this as part of their service.