Risk managers are cautious
Post the Brexit vote no lenders in Spain have changed their criteria for risk assessment but all risk teams have expressed some concerns.
None of the Spanish Banks want to alienate UK loan applicants as they form the largest part of their non resident market but some of the financial uncertainties have to be considered.
Currency exchange rates
Currency exchange rates are by far the biggest concern. Already we have seen a large drop in Sterling with no indication in site as to where this might level out. When assessing affordability of a Mortgage in Spain how much finally per month the loan will cost has an impact on the debt to income ratios.
If sterling continues to drop the cost of the loan each month will rise and may make it difficult for marginal applicants to support the payments going forward.
Other considerations
Other matters like the stability of the UK economy and what impact this may have on business owners and employed individuals is also of some concern to the underwriters but will not and does not have such an immediate and obvious affect as the currency fluctuations.
Commercial teams
The commercial teams of the Banks in Spain may find themselves in coming months at odds with the risk teams as one side looks to minimise possible risk and the other looks to build lending to meet the yearly budgets for non resident mortgages in Spain.
Read the full article:- Mortgages in Spain post Brexit news
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