mortgage for Spainish property

**northernladuk** · 9 November 2013, 19:26

Tread very very carefully would be my advice. I am just in the process of giving my property back to the bank because it didn't work out. I bought just before the boom and I can't give the thing away let alone sell it at the price I need to cover the rest of the mortgage and zero chance of renting it out.

Spain is hovering on bankruptcy and there a thousands and thousands of empty properties going for peanuts. Things may have changed and you can pick up a property at stupid prices but people are getting out for a good reason. If you get it right I guess it may fly but there is a massive chance it won't and you will be left with a millstone around your neck. I know plenty of people around Sabillinas that have lost a lot of money on time on this idea. IMO look elsewhere...

But... if you are going to then...

Speak to the banks first. They own so much property from ex-pats and investors giving them back and can't do sod all with them. Can't sell them cause no one is buying and can't rent them because no one is going. My mates gave his back 4 years ago and it's been empty ever since. No one has even stepped foot in it. Ask to see which properties the banks have and offer then stupid prices on them, I mean less than 1/2 what they say. They must be gasping to get rid. Do not buy anything at asking price, someone will be desperate, if not all of them to get rid.

You then need to get a Spanish lawyer and get him to work on your behalf over there. They will get you a mortgage with a local bank. Mine was with Le Caxia but I had a couple of options at the time. The Halifax have a Spanish arm but at the time they were not linked but that might have changed. Try and avoid anyone dealing in real estate etc, just do it normally, solicitor who will know an IFA or can deal directly with a bank etc.

Also do the numbers and be pragmatic. A couple of hundred Euros profit a month when you have up to 100k euros in it is a very poor return. Compare it against savings, UK or German lettings etc. I think you will be surprised how badly it works out.

But again, do your research, see through the numbers the estate agents give you and do your own research of the area and the apartments etc. I think you find reality is very different to the sale speil.

Good luck if you go for it.

**ASB** · 10 November 2013, 09:38

I'm curious. If you are "handing back" this is presumably a legal right under spanish law and effectively shifts the burden to lender. (Much like the right to voluntary terminate an hp agreement).

What impact does this have on your credit rating? Obviously the risk should have been priced in by the lender. But try this with uk property and mortgage and you will struggle substantially in the future.

**PM_contract** · 10 November 2013, 10:16

Thank you, northernladuk for so detailed reply. There are few points we will definitely take into consideration.

What is your view on Barcelona? This is the area we are looking at. The plan is to have an apartment which can be rented out to holidaymakers short term and can be used by ourselves if needed. Eventually we would like to relocate to Barcelona. Hopefully I will be able to get a contract to work remotely. In my previous contract I’ve spent nearly 4.5 years managing international projects from home in the UK but could have done it from anywhere. Barcelona transport links are also very good.

**northernladuk** · 10 November 2013, 13:39

Originally posted by ASB View Post

I'm curious. If you are "handing back" this is presumably a legal right under spanish law and effectively shifts the burden to lender. (Much like the right to voluntary terminate an hp agreement).

What impact does this have on your credit rating? Obviously the risk should have been priced in by the lender. But try this with uk property and mortgage and you will struggle substantially in the future.

Everything is in such a mess over there banks are taking back the properties and just writing the debt off. I just do the paperwork and hand the keys back. No impact on credit rating or anything like that. They tend only to do it for local residents but the person dealing with it for me over there has negotiated with the manager to let me do it as well. The banks must own at least 30% of the properties on my complex alone let alone the 100's of other complexes all along the Costa Del Sol. It's an utter disaster out there. The amount of debt they must own in empty properties must be staggering and christ only knows how much they are spending on community fees they owe as well so I wouldn't touch Spain with barge pole.

**northernladuk** · 10 November 2013, 13:41

Originally posted by PM_contract View Post

Thank you, northernladuk for so detailed reply. There are few points we will definitely take into consideration.

What is your view on Barcelona? This is the area we are looking at. The plan is to have an apartment which can be rented out to holidaymakers short term and can be used by ourselves if needed. Eventually we would like to relocate to Barcelona. Hopefully I will be able to get a contract to work remotely. In my previous contract I’ve spent nearly 4.5 years managing international projects from home in the UK but could have done it from anywhere. Barcelona transport links are also very good.

Do holiday makers go to Barcelona?? My property is on the Costa Del Sol in between Gibraltar and Banus so I couldn't comment on properties in the cities so might have to take everything I said with a pinch of salt.

**northernladuk** · 10 November 2013, 13:43

Just a side note, the friend I mentioned that gave his back a couple of years ago also bought on in Florida and he says it's worked very well for him. About the same price (probably due to Spanish boom a the time thought) and it's bringing in a tidy profit for him. I wasn't interested in a property so far away as I wanted to visit it fairly cheaply but it shows there is money to be made...just not on the Spanish coastline.

**ASB** · 10 November 2013, 13:51

Originally posted by northernladuk View Post

Everything is in such a mess over there banks are taking back the properties and just writing the debt off. I just do the paperwork and hand the keys back. No impact on credit rating or anything like that. They tend only to do it for local residents but the person dealing with it for me over there has negotiated with the manager to let me do it as well. The banks must own at least 30% of the properties on my complex alone let alone the 100's of other complexes all along the Costa Del Sol. It's an utter disaster out there. The amount of debt they must own in empty properties must be staggering and christ only knows how much they are spending on community fees they owe as well so I wouldn't touch Spain with barge pole.

I see. So its 'simply' down to what you negotiate?

Presumably then you are in unfortunately in negative equity. If these find their way to the banks then its going to be a long time before the outlook improves since the banks must be ending up witg a huge amount of property.

**ASB** · 10 November 2013, 13:54

Originally posted by northernladuk View Post

Do holiday makers go to Barcelona?? My property is on the Costa Del Sol in between Gibraltar and Banus so I couldn't comment on properties in the cities so might have to take everything I said with a pinch of salt.

Costa blanca is very popular. Barcelona is a great city. Very popular. Just come back as it happens.

**MarillionFan** · 10 November 2013, 14:01

So NLUK where do we find these lists of properties for sale by the banks? Out of interest how much did you pay and for what and what's it worth now?

I was looking at Gran Canaria and that seems very expensive.

mortgage for Spainish property