FFA work with UK regulated Independent Mortgage Consultants like ourselves who are very well positioned to organise the lending required but due to the fact our advisers have many years experience in the UK mortgage market we are much better placed to explain the benefits of lending in either jurisdiction rather than an adviser with expertise in just one.
Marc, Stuart, Julian & Alison all have UK mortgage backgrounds & CeMAP qualifications and therefore are well placed to explain the pro’s and con’s of raising finance in Spain, UK or a combination of Spain & UK.
We find that many clients will try to source these borrowings themselves and will have severe difficulties. Raising money from UK property for purchasing in Spain is all about knowing which lenders to approach as many will not entertain lending for this purpose. It is also about how you present the application to the lender in the UK as well as the lender for the Spanish mortgage. If it is not presented in the correct manner at best you will make life very difficult for your self and at worst you will be declined for the loan.
Types of UK residential lending we are able to discuss.
Residential re-mortgage: If clients have no mortgage on their main residence in the UK or have no early redemption penalty on their existing mortgage. Then we can re-mortgage the property to raise funds for purchase in Spain. The property can be re-mortgage up toa maximum loan to vale of 95% as long as the clients fit the affordability criteria of the lender.
Buy to let re-mortgage: Raising funds against buy to let properties through re-mortgage is a relatively straight forward process. The lending is based upon the rental income the property is generating and with 95% of lenders the maximum LTV is 75% of the property value. There are lenders that will go to 85% LTV but their Interest rates are considerably higher.
Second Charge Secured Loans: We use quite a few of these as a vehicle to raise funds for Spain. They are very useful when a client just needs to raise 20, 30 or 40’000 sterling to boost their deposit. Although we have done secured loans for in excess of 100 thousand. The loan is set for the same term as their remaining mortgage and runs alongside it without interfering with it at all. The rates are slightly higher than a standard mortgage as the risk for the lender is higher. However they are nothing like the rates you get for personal loans. The benefit of the secured loan is in many cases they can be taken on an interest only basis. There are no early redemption penalties with secured loans, so when you current tie in finishes on your mortgage, you can then re-mortgage and roll the secured loan into the existing mortgage.
Bridging Loans: Many clients come to Spain and find their dream property only to say they have to wait until their UK property is sold before they can buy in Spain. Rates for Bridging loans have come right down in the UK and can go as low as below 5% . They are an ideal answer for clients in this situation. They release the funds they need (up to maximum 70% LTV) to purchase in Spain with a Bridge. As soon as the property in the UK sells the bridge is cleared.
Commercial Loans: Many of the clients that buy in Spain have their own businesses and often these companies own their own premises on a few occasions we have used commercial lending to secure a mortgage against a commercial unit to raise funds for a deposit in Spain.