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View Full Version : Are there any banks in Tenerife where we can get an 80% loan or mortgage?



Madelene B
14-08-2012, 21:00
Hello all
My husband and I are looking for a holiday apartment in Puerto and was recommended to contact Solbank for the loan.
We thought that we would need to pay 20% cash and the bank loan would cover 80%, but it seems that Solbank
can cover a maximum of 70%. So, 30% cash + approx. 10% for IVA and other fees and taxes= 40% cash in total.:crazy:

So to my question- is there any other bank on the island that cover upto 80%. Would make it so much easier
for us.
Thanks

Rickiebear
14-08-2012, 21:27
Hi, we used Solbank, as we were 'introduced' through HSBC, so we got preferential rates throughout the length of the loan. They were very good, helped us through the purchase, with searches, insurances etc. they have been very good since.
Can't remember now if we could have had more than 70%.
Do check with your home bank if they have a similar arrangement, it has saved us a lot on money.

CIM
14-08-2012, 21:28
70% is the max. Not everyone will qualify for it either - even if affordability is there. Different banks assess different types of income (self employed / salary / dividend / BTL income etc) in very different ways.
Some banks prefer employed over self employed, dual applicants over single applicants. Some will look at credit card balances, others ignore them. Some will disqualify you if you have BTL property in the UK.
Also, you need to budget slightly more for fees and taxes, I would say between 11% and 12% (42% cash in total.) On top of finding out which banks will give you the loan you need, you need to check interest rate, the base rate upon which it is based and the margin applied as many are now applying large margins to low base rates. Not so bad now but will cause problems for people when base rates inevitably rise. Additionally, look at the linked products - upfront life assurance for the balance of the loan etc can run to tens of thousands of Euros being added to your loan amount.

seanocelt
15-08-2012, 04:10
Eye popping post Andy, many a dream needs re-evaluating. Thanks. Quality info.

Madelene B
15-08-2012, 07:05
Thanks for all your post.
So we will probably go with Solbank and since the two of us are employed and we will both apply I hope that that will be favourable to us. We live in Sweden and there is no bank that will give a loan for a property in Spain, unfortunatly, would have been easier that way.
Could you tell me more about the life insurance?
The bank clerk that I talked to mentioned that we would need a life insurance alt. a home insurance. Which would perferrable? We want to keep the costs down in short and long term of course.
Thanks

berni
15-08-2012, 07:58
If you buy a repossessin directly from the bank stock they will give you 100% mortgage. A colleague of mine is currently purchasing a house via Santander. She was told max 70% both for resident and non-resident mortgages unless she buys one of their repossessions and she is now getting 100%.
There was quite a vast selection to choose from

Madelene B
15-08-2012, 15:51
A life insurance is mandatory in this case, I just found out, but the home insurance isen't, (but I would want that anyway).

Berni- what you write about repossed properties is intresting. I read some where a few months ago that only the properties that aren't very attractive goes for sale to the public, by the banks. The good ones are snapped up by bank employees and their family. Maybe not true. I will have a look at the Santander web page.

However, our hearts are set on an apartment we found at an "inmobiliaria", ticks all the boxes. Keeping our fingers crossed.

I read here and there that it is imporant to involve a lawyer when buying in Spain. As I understand it the "notaria" will go through the legal status of the apartment with both seller and buyer present. Why do I need a lawyer as well? I want to buy a small apartment, nothing repossed or land. Sorry for my lack of insight here.

Rickiebear
15-08-2012, 18:32
Hi, we didn't employ a lawyer. We were confident that Solbank made sure the purchase was legal, and it was 10 years old. We also used a very good English interpreter. The Notaria was also very good ensuring we understood all that was involved.
As far as insurance is concerned we paid a 'one off' life insurance policy for the life of the mortgage, and then annual building and contents insurance.

Suej
15-08-2012, 18:55
70% is the max. Not everyone will qualify for it either - even if affordability is there. Different banks assess different types of income (self employed / salary / dividend / BTL income etc) in very different ways.
Some banks prefer employed over self employed, dual applicants over single applicants. Some will look at credit card balances, others ignore them. Some will disqualify you if you have BTL property in the UK.
Also, you need to budget slightly more for fees and taxes, I would say between 11% and 12% (42% cash in total.) On top of finding out which banks will give you the loan you need, you need to check interest rate, the base rate upon which it is based and the margin applied as many are now applying large margins to low base rates. Not so bad now but will cause problems for people when base rates inevitably rise. Additionally, look at the linked products - upfront life assurance for the balance of the loan etc can run to tens of thousands of Euros being added to your loan amount.

Sorry for my ignorance but what does BTL mean please?:stupid:

CIM
15-08-2012, 18:56
Get a good lawyer/gestor to check everything for you, the bank couldn't care less so long as the property stacks up as security for the loan. They are not a substitute for independent advice.

Don't take one off insurance, its a rip off and you end up having tens of thousands added to the loan amount for the life cover which you then pay interest on for the term of the mortgage. It is very difficult to get this money back if you pay off the loan early (sell the property for example) as it has been paid to cover the life of the mortgage which could be up to 30 years. It is such bad practice it has been outlawed in the UK.

Take the monthly instead, cancel it after one year. Usually the interest rate will be increased but you still make a very big saving, then get some life cover correctly brokered by an insurance agent and ensure it covers both of you for the whole amount as banks usually only cover you for half the outstanding mortgage which is effectively useless if the worst should happen to either of you.

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Sorry for my ignorance but what does BTL mean please?:stupid:
Buy to let

marbro8
15-08-2012, 19:16
Sorry for my ignorance but what does BTL mean please?:stupid:
thanks suej i thought it was bacon lettuce and tomato lmao

Suej
15-08-2012, 19:28
I must admit a sarnie was my first thought too!:yum:

cainaries
15-08-2012, 19:48
I'm only guessing it means buy-to-let .....but I had to think about it and I may not have thought about it right. All professions have their jargon! I think .. tentatively...that if you apply for a mortgage on a property you want to buy for letting not for living in (in the UK this is) you get offered a different mortgage deal. Of course residential/touristic might apply in Tenerife, I honestly don't know.

Suej
15-08-2012, 21:09
I'm only guessing it means buy-to-let .....but I had to think about it and I may not have thought about it right. All professions have their jargon! I think .. tentatively...that if you apply for a mortgage on a property you want to buy for letting not for living in (in the UK this is) you get offered a different mortgage deal. Of course residential/touristic might apply in Tenerife, I honestly don't know.

Go and have another glass of wine C! got the answer a few post back!:eyebrows:

cainaries
16-08-2012, 00:18
Go and have another glass of wine C! got the answer a few post back!:eyebrows:

Thanks, I will, are you pouring ...?

Rickiebear
16-08-2012, 06:54
Get a good lawyer/gestor to check everything for you, the bank couldn't care less so long as the property stacks up as security for the loan. They are not a substitute for independent advice.

Don't take one off insurance, its a rip off and you end up having tens of thousands added to the loan amount for the life cover which you then pay interest on for the term of the mortgage. It is very difficult to get this money back if you pay off the loan early (sell the property for example) as it has been paid to cover the life of the mortgage which could be up to 30 years. It is such bad practice it has been outlawed in the UK.

Take the monthly instead, cancel it after one year. Usually the interest rate will be increased but you still make a very big saving, then get some life cover correctly brokered by an insurance agent and ensure it covers both of you for the whole amount as banks usually only cover you for half the outstanding mortgage which is effectively useless if the worst should happen to either of you.

- - - - - - - - - - merged double post - - - - - - - - - -


Buy to let
Hi, we found the annual insurance suited our needs, we had a short term loan, did not intend selling the apartment, checked out other policies including those in the UK. It was convienant as we were not living in Tenerife, and therefore having to only pay once was easy. As I said previously I was introduced to Solbank via my UK bank, which carried with it 50% discounts throughout the length of the loan.

I regularly check current rates, which have only gone up. I am more than satisfied with Solbank and would recommend them to anyone. I only wish the UK banks were so helpful.

Megaloo
16-08-2012, 09:10
Although I have not had experience with a loan. I find Sol Bank extremely helpful especially their new account with no Bank Charges and the facility to have a regular direct debit from England free of charge.

Madelene B
17-08-2012, 19:08
Thanks for all the usefull tips and advice.
Since we are "loaded with cash", the bank valuation (of the apartment we are interested in) is important to us.

We have put an offer of 62 000€ on the apartment, (even before bank approved loan) which had 74 000€ as asking price :scared:. Our offer was rejected. The seller didn't want to sell for less than 70 800€. We have not negociated further, we are not sure that the apartment will be valued to that amount (or more). We really want it, but if the final price doesn't match the valuation, we might be struggling, .
It seems sensible at this moment, to await valuation. Any thoughts?

Madelene B
09-09-2012, 09:26
Rickiebear- good to hear that you were happy with Solbank.
What do you mean with a "one off". That you paid the premium once in a lump sum?
Is that the most economical thing to do? I mean, I just want to get a grasp on things before signing any papers.
Is the premium of the life insurance related to the sales price of the property, the bank loan size or the valued price? I'm thinking there is a relation to the size of the loan, since that is what the bank want to "protect".

Do you still have Solbanks home insurance then? Or have you sourced your own?