Advantages of a mortgage

If you are looking to buy in Portugal or Spain, we can help both residents and non-residents. Here is a case study of two friends who are buying a villa in Spain and how they overcame  challenges with the right mortgage specialist team. 

Advantages of a mortgage 

One of the advantages of a mortgage is that it can help you stretch your money further. For instance, you may have enough cash to buy an apartment in southern Spain, but by using bank financing, you could find a villa that is now within your budget. This isn't just good news for your lifestyle - you will get a greater investment return. In the following case study, we see that financing helped to secure a new build villa in Spain.  

Friends in different countries 

Two friends want to work together to secure financing for a new build – a villa in the Balearics. The clients prefer a mortgage in Spain; a long-term fixed agreement with a minimal amount of additional requirements. 

Banking 

Here, we are dealing with a more complex client profile and the licensing issues surrounding a new build property. The timing of the financing for the client needs to coincide with the completion date of the property. There is also the new mortgage legislation in Spain to navigate; with only a few banks even offering fixed rates to non- Euro citizens. 

Financing 

In this case, the clients had an income structure that would be difficult for a Spanish bank to understand. The challenge here is to convince the financial institution that the client’s future income is stable.  

Mortgage Direct identified the income received through director loan repayments, dividends and income from the clients’ involvement in different companies. They worked with banks to help them understand the true income in order to satisfy the required affordability criteria. As is typical for large transactions, the case needed a risk assessment approval from the bank.  

Approval  

Within several weeks, the clients had full bank approval for a 60% LTV mortgage, with a fixed rate of 1.55% for a 20-year term. The clients were required to purchase building and content insurance; a condition that they were satisfied with. There were delays with licensing the property which caused the initial offer to expire, but by working closely with the bank and the client, a second, successful application was created. 

 

When you shop for a mortgage, your lender or mortgage broker will provide you with options based on your personal situation. However, traditional mortgages sometimes restrict many buyers from taking advantage of new real estate opportunities. Properstar is partnering with a leading mortgage broker Mortgage Direct, that is operating in Spain and Portugal and can help you to find the right mortgage solution. You'll get personalized mortgage advice and up to 2 no-obligation mortgage quotes. Find out more details and get your quote directly. 

 

* Mortgage Direct is regulated by the BANK OF SPAIN Company registered in the BoS's Register of Real Estate Credits Intermediaries under number D108.

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