January mortgage news is a mixed bag

Mortgage levels for January

Both the INE and the Notary offices published this month the New Year first month data for mortgages in Spain.

Whilst in terms of both numbers of loans and capital lent both reporting bodies were showing a year on year increase for loans registered at land registry in the month the increase over Decembers results were the lowest for a few years.

Wider data

The wider data which is published by the INE and includes matters such as average interest rates and mortgage product types indicated a continuing trend toward fixed rate loans. Whilst the numbers are still very small the last 12 months have seen a shift from around 5% of loans completing on this basis to now just over 10%.

Average loan sizes came under some pressure in the month although overall they continue each month to grow. This coincided with a reported 2% increase in average price per meter square being paid by purchasers owning property in Spain.

Madrid leads the way

Regionally the strongest areas in the month of January were Madrid and Valencia. Some of the coastal and Island regions who had very strong performance through 2015 fell back slightly.
Whether this is a one month blip or a trend toward less mortgage applications from foreign buyers due to uncertainty surrounding the Political arena in Spain will remain to be seen.

Net loan outflows

For Spanish Banks one area of good news was that the gap between the amount of loans they lost due to cancellations or redemptions and the amount of new loans they granted narrowed to less than. 1,000.

Read the full article : - Spanish mortgage data for beginning of year is mixed news

Mortgage application process Spain

When is a mortgage offer not an offer

Whilst the application process for a Mortgage in Spain closely resembles that of other countries the process of pre-approval can be confusing and lacks robustness.

Apart from one lender no Banks in Spain have sophisticated scoring systems that allow them to pre-approve loan by checking key parameters.

Scoring systems

Sabadell Bank who do have a scoring system which allows for quick responses on what it is likely they can offer do not however use this scoring system in the way in which a UK lender might and an applicant used to pre-approvals from other countries should proceed with caution when they are told they are approved and on what basis.

In Spain only fully packaged applications that have been passed to and reviewed by the Risk Teams at either regional or national level are deemed to be fiscally approved. Any other information however official it may appear given at branch level is just an illustration of what could be posible and is not in any way shape or form an approval to lending.

Valuation first

Many Banks in Spain will not pass to their underwriting teams a documented application for fiscal approval until a valuation is paid for and the result is back to be added to the file. This can mean a valuation fee must be paid before an applicant even knows if they are personally approved and meet bank criteria.

Avoid the pitfalls

Most Banks, if you insist on it or are using an experienced broker will provide, without valuation a fully underwritten approval to lend but just because documents have been submitted do not assume it has been seen by Risk. Often branch staff will just review the file and state that they see no problems.

Language barriers and a miss-understandings over how far in the process the application is can cause confusion.

Read the full article :- Applying for a Mortgage in Spain

Loan reporting for Spain 2015 final figures

February mortgage reports

Data published in February from the various reporting bodies in Spain show that both mortgages in Spain and house sales have made a slow but steady recovery during 2015.

The INE who reports on registered Spanish loans and registered transfers of property titles rather than signings showed a higher year on year increase than the Notary offices. This would seem to indicate that signings from the back end of 2014, registered in early 2015, were higher than for the same months in 2015.

2015 results

Overall during the year mortgage capital lent grew by a higher percentage than numbers of new loans granted. The higher increase was due to the average loan size increasing during 2015. Cataluna for example saw growth of over 60% when relating it to capital lent but only a 37% increase in numbers of loans. Madrid on the other hand was the only region who saw a higher level of growth on numbers of loans to capital lent. 

In general coastal areas and those most attractive to foreign buyers saw the best level of growth both in terms of financial facilities and house sales.

Rates and product types

The average rate by which Spanish Mortgages were granted increased for the first time in many months during December despite the Euribor declining  slightly. This may be due to the ongoing trend toward fixed rate product types. Fixed rate best buys may provide a higher immediate rate but will provide good value for money and stability in the medium to longer term.

Net loan outflows

Mortgage in Spain redemptions were 55,000 higher than new loans constituted so net outflows remain the main challenge for Spanish Banks going forward.

Read the full article:- Home loan results for December and 2015 in Spain