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
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