Net outflows for lending widen in March

Lending news for Spain remains relatively upbeat in March, except when considering net outflows.

Data issued today by the INE in Spain showed a continuing rise in loan levels in Spain where it relates to mortgages for homes.

Capital lent, number of new loans registered and average loan size all increased against the same month of the previous year.

Against the previous month of February whilst not out of sync with normal yearly trends the figures were not so bouyant. Overall numbers were down with the most significant change being a large drop in average loan size.

Index

Euribor remained the favoured index and varibale rate products continued to form the bulk of mortgage prodcut type completions.Whilst we have seen Spanish Banks launch new and more competative fixed rates in the last few weeks this has not as yet filtered through to changes in the type of loans being completed on.

Interest rates

Average interest rates were down to 3.36% in March partly due to the falling Euribor level but also in part due to a more competative general environment.

Regionally the Canaries had a dire month and Andalucia did not perfrom as well as normal. Madrid had the most capital lent with Cataluna not far behind. The Balearics showed considerable increases within the months against a backdrop of stagnant figures for the first couple of months of 2015.

Net outflows

Net outflow figures widened in March after narrowing in February. Spanish Bank continue to grapple with more loans cancelling than new loans going onto the books and the subsequent challenge this will cause for future earnings.

Read the full article :-Lending registered at Land registry up year on year.

Fiscal approvals for mortgages in Spain

Do Spanish Banks offer financial approvals for buyers

Spanish Banks do offer what is known as an AIP but the quality, validity and process by which it can be gained varies from Bank to Bank.

Some Banks will only send and underwrite a fully documented application when a valuation has been undertaken. This type of Bank should be avoided as it requires the applicant pays for a valuation before even knowing if they are accepted by the Bank fiscally.

Other Banks will offer a full underwrite as long as a specific property can be shown and all fiscal documents are presented.

For applicants who have not found a property a few Banks will still risk assess the fiscal situation but many will just offer viabilty check.

Process of applying for a mortgage

In all instances for the underwrite to have any validity at all a fully packaged application must be presented. Any documnet given to a potential borrower at Branch Level that has either not included providing the formal paperwork or has not been sent tio the Head Offcie risk team is not worth the paper it is written on.

All Banks can provide quotes based on what the applicant is telling them but without this being supported by proof the quote remains just that, an indication of the terms and conditions that can be expected.

Documents required

All loan applications will need to be fully packaged and include the required documents this will mean showing evidence of incomes, which is always net incomes in the Spanish process. Unless the buyer resides on a non tax paying jurisdiction incomes will need to be shown on a personal tax retrun to be assessed.

Supporting bank statements showing incomes being recieved will be needed and so will a copy of the applicants credit file. Spanish Banks cannot credit search an individual in their own country of residency so need the applicant to provdie a copy of their credit file.

Credit score which is a major underwriting tool in other countries is not taken into account by Spanish Banks. The credit file is required only to check what debts are held, how much per month they are costing and the payment history.

Read the full article : - Approvals in principle in Spain