STATEMENT FROM FLUENT FINANCE ABROAD – JUNE 2011
Many things have changed in mortgage markets since the credit crunch and Spain is no different. Spanish banks are generally lending to foreign nationals but at a reduced loan to value (LTV) of between 60 – 70 %. 
There are still possibilities to find finance up to 100% but these generally are quite difficult to find and is based on property types and locations. 
We here at Fluent Finance Abroad are pleased to say that we have been fully operational through the global credit crisis and are continuing to do so. 
One of the main reasons for Fluent Finance Abroad to be able to continue assisting non Spanish clients in financing their property requirements has been that through FFA’s owner Marc D. Elliott, they have a fully UK qualified financial adviser (FPC & CeMAP) and mortgage consultant advising clients on the best way of financing their Spanish property purchase with the most appropriate mortgage for each clients’ circumstances. 
Great care is taken by FFA in finding out each client’s specific needs before any recommendation is given by FFA so clients can feel safe in the knowledge that they are entering into a financial commitment that they are going to be able to afford. 
To date, there are NO regulations in Spain governing mortgage advice and practice. This has been a contributing factor to the decline of the mortgage market and property prices in Spain, as the level of advice that has been given has been poor at best. It is therefore of great importance that any potential mortgage client, looking for assistance in finding the best mortgage finance deal, must take great care when searching for a competent person who is sufficiently qualified to give advice on such a complex, serious and long-term financial commitment.
We believe that you should choose Fluent Finance Abroad as your unbiased, independent mortgage consultancy practice to guide through your Spanish mortgage financing needs.

ABOUT US-
We specialize in finding for our clients the most appropriate form of finance to purchase their dream home overseas, whether it is a holiday home or purely for investment purposes.
Our team of UK qualified Financial Advisers (FPC) and mortgage professionals (CeMap) will assist clients with the complex decision process. 
Our approach to overseas property purchase finance focuses on you and fully understanding your unique set of objectives, then fashioning a customized plan, tailored to helping you achieve your specific goals. 

We work in an objective, customized, and creative manner to provide smart solutions to satisfy real life financial needs. We provide comprehensive services that deliver smart and manageable solutions for you. Here are just a few of the services we offer:

- Residential Purchases
- Equity Release & Re-mortgaging
- Investor Packages
- Self Cert Loans
- Buying within Company Structures
- Commercial Lending
- Self Build Finance.

Our Fees
To cover our administration costs we charge a Broker Fee of maximum 1%, over average has been 0.75%. This is an inclusive fee and covers the cost of any searches we may need to make to assist your application. We DO NOT deduct anything from the mortgage advance unlike many brokers. Our fee is payable upon receipt of your application and can be paid by cash, cheque or bank transfer. There is no additional charge made for card payments. If we are unable to obtain a mortgage offer for you for any reason the fee will be refunded in full, subject to status and valuation results.
Valuation Fees
As in the UK, a valuation of your property will be required before the lender will issue a "binding mortgage offer". The fee for this varies depending on the value of your property. As a guide, you should allow a minimum of 400€ for this. 

Non Resident Spanish Mortgages
Spanish mortgage up to 70% loan to value with up to 1 year interest only
Equity release or re-mortgage in Spain up to 60% loan to value on a repayment basis
Spanish Commercial lending up to 40% loan to value
Bridging finance by negotiation secured against UK or Spanish property
Spanish Resident Only
Full finance and costs packages available from banks in Spain
Up to 80% loan to value
Fixed payment mortgages
Low start mortgages
Many of these products are not available direct from the banks in Spain and will be subject to the lenders criteria and your status. Rates and costs are available in writing on request for all Spanish mortgages.

Raising Finance in Spain
Loan to Values
Standard loan to values can be up to 60% for non-resident mortgages in Spain and are always linked to the valuation of the property in Spain not the purchase price.
Most Spanish mortgages whilst linked to a percentage of valuation cannot exceed the price declared on the Escritura (title deeds).
Spanish Mortgage Product Ranges
Finance in Spain is predominately linked to a variable rate and on a repayment basis. Spanish variable rate products are generally linked to the yearly euribor (European inter bank offered rate) and your interest rate will be reviewed yearly. Your interest rate for the first 12 months is determined by the euribor at the month of completion plus the fixed margin above that which your selected Spanish bank is charging. Some offshore banks can provide mortgages in sterling secured against your Spanish property purchase, linked to the Bank of England base rate.
Fixed rates like the UK tend to be higher than the prevailing variable rate.
The interest rate charged increases with the amount you need to borrow. Loans up to 60% of the value of your property attract the best rates. Between 60% and 70% are still competitive however loans over 70% of the value have the highest charges. 
All Spanish lenders charge an arrangement fee for new loans. These vary from 1% to 2%, again dependant on your circumstances. Typically you should budget for a fee of 1.5%
Equity Release and Re-mortgaging in Spain
Releasing equity and re-mortgaging is available through select lenders in Spain. The legal process of securing a loan in Spain it is more difficult and costly to make any changes to your Spanish mortgage post completion. Raising funds against an unencumbered Spanish property, releasing further funds or changing the terms is controlled by the Bank of Spain and further tax; bank and notary costs will apply. In Spain under the current legislation it is advisable to raise the maximum funding you require for your current and future needs. Lender, product and rates need to be carefully selected to ensure they are the most suitable for your needs. Lender and product hopping, which is now standard practice in the UK, is not advisable in Spain without careful planning and advice.
Term
Spanish mortgage terms range from 5 to 40 years, are dependent on age and Spanish finance provider selected. Most Spanish banks will expect the mortgage to be repaid by age 70 but it is possible to obtain a mortgage in Spain up to age 80.
Costs
All Spanish banks charge an arrangement fee for dealing with your mortgage in Spain. Spanish bank opening fees are payable at completion. All other costs in relation to the Spanish mortgage deed including mortgage tax, registry costs and some of the purchase deed costs are deducted from your gross mortgage advance. It is not possible to add your costs to the Spanish mortgage unless your valuation level allows you to. It is important to check you have accurately assessed and accounted for all expenses to ensure you are not left short of funds for completion day. We would suggest you allow at least 12% of the purchase price to cover your purchase and finance costs in Spain in full and that you make sure you are made fully aware of the provision of costs for completion by your lawyer.
Currency
If you take a Spanish mortgage with a Spanish bank the capital provided and repayments will be in Euros. Offshore lenders can also take security over your Spanish property and many will provide the funds and take repayments in any major currency of your choice. Your interest rate will be linked to the base rate of the currency you select. For most Euro mortgages this will be the yearly euribor.
Underwriting Criteria
Most mortgages in Spain are only granted on a full status basis. It is unwise to allow yourself to be talked into submitting false documentation and you should avoid brokers who offer this service. A fraudulent application could put your Spanish property and your deposits at risk if found to be so at a later date. Most Spanish banks will assess your income net of tax and will want to see that the combined existing UK and new Spanish monthly liabilities do not exceed 1/3rd of your proven monthly net income. Each bank in Spain will underwrite in a slightly different manner. In general Spanish banks will not take in to account any projected rental income from your Spanish property when assessing your application. There are no specific "buy to let" products currently available.

Non Resident Spanish Mortgages

Spanish mortgage up to 80% loan to value with up to 10 years interest only

Spanish mortgage with first 15 years interest only

Spanish flexible mortgage plan including offset and credit line facility up to 70% loan to value includes up to 10 years interest only facility

Self-certification mortgage in Spain up to 65% loan to value for purchase & equity release

Interest only for 30 years

Offshore company held asset mortgages up to 70% loan to value for loans above € 500.000 including capital repayment holiday by negotiation

Equity release with up to 500,000 Euros cash out

Equity release or re-mortgage in Spain up to 75% loan to value on a repayment basis up to 80% including interest only facility

Spanish Commercial lending up to 60% loan to value

Spanish Construction mortgages up to 70% of value of completed project

Land mortgages for plots in Spain up to 60% of value

Bridging finance by negotiation secured against UK or Spanish property

Spanish Resident Only

Full finance and costs packages available from banks in Spain

Up to 120% loan to value

Interest only and flexible mortgage plans up to 70% loan to value Fixed payment mortgages

Low start mortgages

Many of these products are not available direct from the banks in Spain and will be subject to the lenders criteria and your status. Rates and costs available in writing on request for all Spanish mortgages.

Standard Non-resident Documents Requirements for Spanish Mortgages

Resident Document Requirments

Below is a list questions we would always advise you ask your lawyer in Spain to confirm and check when appointing them to represent you for the purposes of buying property in Spain:

Is the full square meterage of my Spanish purchase fully and legally registered?

Is the land it sits on registered as rustic or urbanised and what are the possible implications of buying on rustic land?

What costs including the standard legal and tax costs will I have to account for (instruct them to follow Spanish law in relation to IBI, Plus Valia and any existing Spanish mortgage redemption costs as these should be paid by the vendor not you)

Are building licences and first licences of occupancy in place?

Is the 10-year building warranty in place? (for properties less than 10 years old)

Am I buying direct or is my purchase a cessation of contract. If so what are the implications for me?

Will this purchase have any under declaration? (Request your lawyer to negotiate the minimum possible as to do so is in your best long term interest)

What capital gains, inheritance, income and wealth taxes will I become responsible for?

What deposits do I have to pay and at what point do they become non-refundable?

What will you charge me and what other disbursement costs will be payable?

Is your firm working solely on my behalf as the buyer? (Lawyers are not restricted in Spain to only work on behalf of either the vendor or the buyer)