Mortgage completion levels in Spain
Based on current data all Banks will be behind their yearly targets in both the resident and non resident sector.
Mortgage arrears as a percentage of live mortgage books has hit an all time high and repossessions continue to climb. One of the answers to these two underlying issues the Spanish Banks are experiencing is to grow the mortgage book with performing loans. Whilst each month the Banks have a net outflow of mortgages the percentage of non performing loans will grow.
Growing the mortgage book in Spain
Pressure on the Banks will increase throughout the year in the mortgage arena and further enhancements to product availibilty, a reduction in interest margins and improvements to the mortgage application process are all required in order to stabilise and regrow lending in Spain.
Issues for resolution for non resident loan applications
For non resident applicants the idea that you cannot get a financial approval in place until you have a specific property; and the fact it is not clear with many banks what terms you can expect until after an application has been made and a valuation paid for is completely alien to them; and not in keeping with the transparent and well regulated mortgage process in their own countries.
High margins above Euribor that may have been a necessity during the period of high funding costs for the Banks in Spain are also holding back applicants as often much better terms and conditions can be achieved by using a security in the country of residency rather than taking a Spanish loan.
Whilst there have been improvements during 2014 further rate enhancements, an increase in loan to values, improved financial approval processes and the dropping of compulsory and often unecssary products is required to kick start the non resident mortgage market in Spain.
Read the full article : Mortgages in Spain half yearly update
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