The global credit crisis of 2008 led to a property downturn worldwide, which meant that a lot changed quickly for the people of Spain. For example, it is now much harder to obtain finance for a mortgage than ever before, putting homeowners in a more difficult position than ever before.
As recently as that year, it would have been a relatively easy task to visit your local high street bank or building society and obtain a loan against your property, as long as there was enough equity to take out at the time. These days, this is not the case for many people, meaning that they have had to turn to a different process – alternative residential lending in Spain.
High street lenders have now found themselves under more pressure than ever before to be more responsible when approving large loans. As a result, many companies have now started to take a more conservative approach to authorising mortgages. As such, properties are now subject to more stringent external audits, so they are being very careful when underwriters come to making lending decisions.
This new strategy affects many people who are deemed to be a slightly higher lending risk to underwriters, meaning it is less likely than ever that they will get a good deal on their mortgage. In such bleak times for those looking for a mortgage, what is the answer for those who own a property and have equity tied up within it? In order to achieve mortgage loans in Spain, banks are now asking mortgage applicants to fit the following criteria.
- They are the correct age
- Have enough demonstrable income over a certain period of time in order to service the mortgage
- Are of the right residential status or nationality
- Are clear of any outstanding debts. For example, community charges, debts with your local taxes and that you have no arrears with any previous loans, mortgages or credit commitments
- Have a perfect credit score
- That your property is NOT classed as built on rustic land
As you can see, there is a fair amount to consider here when applying for personal loans in Spain for a mortgage and might prove overwhelming at first. But these are just some of the tight criteria that you must meet if you want to obtain a sustainable mortgage from one of our Spanish banks.
If you feel like you don’t meet all of the criteria yet, don’t worry. At Fluent Finance Abroad, we are able to use our experience and knowledge in the field to help you overcome these potential hurdles and give you a better chance of obtaining a mortgage on your property.
We totally understand that lending can, and should, be looked at on each applicant’s merits, as well as the circumstances of each individual client. With this in mind, we have been busy building a mortgage alternative in Spain, which can solve any lending opportunities that banks are unable to unwilling to consider.
Contact our team
So, if you feel like a mortgage is unattainable, think again. Our friendly and professional team will gladly work with you to make that prospect more realistic. If you would like to get in touch regarding more information on alternative lending or any other aspect of our service, then give us a call on 0952 85 36 47 or email us at email@example.com. You can also fill out our online form with any detailed enquiries about quick loans in Spain and our team will get back to you as soon as possible.
This client was 79 years of age and was recommended to FFA by his bank when he asked for a €40.000 mortgage on an unencumbered property which he was refurbishing. He needed the funds to complete his project which was to turn a two bedroom, two bathroom bungalow into a three bed, three bath independent property. The bank of course couldn’t assist even though AB had completed 85% of the project using his own funds.
FFA went to visit the client at the project and it became clear that the lending opportunity was a good one and we found a Peer to assist AB complete his project.
Due to AB age, FFA insisted that he took independent legal advice and we met with his representative to go through the lending contact with AB and we signed at notary with all parties present and in agreement.
Don’t be afraid to make the change if you are not happy with the service you are currently getting.
Mr & Mrs TPW
These clients we in a position to buy a plot of land in a very prestigious area of Marbella and start constructing their dream villa.
They have a very international business but were not considered to be resident in a specific country even though their business is very recognisable, therefore Spanish banks were unable to assist.
They needed a large sum of €2 million to complete the property but now it has been completed and it on the market for €8 million and being rented on a short term basis until a buyer can be found.
Has a plot of land which she inherited from her father’s estate and wanted to build a small villa as an investment to either rent out or sell on for a profit.
She approached her bank for a self build mortgage which should have been straight forward but, unfortunately, as she runs a mainly cash business, she was unable to prove to the bank that she had sufficient income to service the mortgage. She also had another property that she lived in, un-mortgaged, which we were able to lend on so she could release the funds necessary to get her project off the ground.
We have been able to inform her as to what she needed to do in terms of income verification in order to obtain a high street mortgage and she is currently working with her accountant’s on her next tax declarations so that we can refinance the Peer to Peer lending when her tax returns are due at the end of the tax year.
The project is 80% complete and will be finished and ready for sale in 6-12 months’ time when all the licences have been granted by the town hall.
If you have a lending idea and you have been turned away by your bank or want to speak to us to see if FFA can use their contacts either via the traditional high street route or via the alternative Peer to Peer lending market, please feel free to make contact at your earliest convencience.