New Self Build mortgage in Spain

Construction loans in Spain

Self build or construction loans in Spain have been difficult to achieve since the start of the financial crisis.

This has been due to the much higher risk for Spanish Banks of being left with unsaleable half built property or land in the event of a default.

Not only have they been difficult to achieve but the whole concept of undertaking such a project unless finance was a want rather than a need has been very high.

Self build application process

Banks in Spain will not lend against the land and expect mortgage applicants to have already committed to buying the land and have paid for an Architect to draw up the project and to have applied for the building licences before they would risk assess an application at all.

New product launched

One lender has now launched a product that will allow for the mortgage to be agreed before the land is purchased and will offer up to 40% of the land cost on purchase of the land and up to 70% of the construction cost.

This in itself is much better than other lenders will consider but also means the buyer can get their Spanish mortgage application in process for a self build and underwritten before they commit large sums of money

The mortgage product type is new so as yet untested and is often the case the process may not be as simple as it is outlined but given there are no viable alternatives it is a step in the right direction.

Terms and conditions

Rates and conditions when a loan is approved will match the lenders current best buys for resale purchases so there is no hike in rate for the more risky product.

Read the full article :- Self build lending in Spain

Spanish loans increase in January

January lending data

January loan figures in Spain as published by the INE and from newly registered lending at land registry saw big increases in both number of new new mortgage contracts and capital lent.

Struggling regions see a turn in fortune

Even in regions where the numbers of new loans were lower than December due to the average loan size being greater all regions managed to show an increase in capital lent.

Catalonia who have suffered since midway through 2017 due to the unrest saw massive bounce back in the month both over the previous month and the same month of the previous year.

Murcia who struggled all of last year also had a very good month.

Interest rates drop but there could be pressure coming.

Interest rates for variable rates are down 14% on last year and fixed rates down 5.5%. The euribor held steady in the month at minus 0.191%.

Fixed rates as a percentage of total lending held at 37% which seems to be its natural level. Pressure on fixed rate levels came within the month of March as cost of funds for the Banks in Spain rose so we may see fixed rates moving up shortly.

Spanish Banks have a net inflow of lending for the month.

Net loan inflows

Spanish Banks will have been please to see an increase in numbers of loans being added to the book rather than a month of net outflows and whilst the increase was small never the less it was an increase.

Read the full article:- Good news for Spanish home loans