Tenerife Property – Buying with Spanish Mortgages pt 2

If you are able to add the mortgage clause to the contract – your money is no longer at risk should the banks let you down at the last moment or should the valuation come in low or the bank decide they do not want to lend against that specific property etc.

So now the clause is added, you need to find that mortgage.

At a maximum of 70% Loan to value (LTV) and with taxes and fees of approximately 10%, you need to come up with 40% of the purchase price if you qualify and are givern a 70% mortgage – this is the best case scenario.

So on a 200,000€ purchase for example, if you are offered a 70% mortgage (140,000 Euros) you need to find the difference (60,000 Euros) plus the costs (20,000 Euros) which totals 80,000 Euros cash.

If you want to quickly determine your realistic budget when buying with a Spanish mortgage, take the total amount you have available – 120,000€ in cash for example, and multiply it 2.5. So 120,000€ as a cash deposit would give you a maximum budget including taxes and fees of 300,000€.
I used to broker Spanish mortgage before I started selling property in Tenerife so I have an excellent understanding of the mortgage market here, the kind of documents you will be asked for and what is realistic for most peoples circumstances. I´m happy to give anyone a quick overview if they need it and I can also introduce you to a fully qualified and regulated mortgage broker who can help you progress an application.