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Welcome to the February (2020) Newsletter (Mortgage Direct)
You may already have heard about new regulations that were introduced in Spain last summer (2019). This requires that all mortgage brokers to have passed a new exam for credit intermediaries in Spain and under the new regulations, it is compulsory to have this qualification in order to give mortgage advice to clients. All of the mortgage advisers at Mortgage Direct have passed this exam and qualified advisers like those at Mortgage Direct can be updated throughout by the banks and are fully engaged from start to finish. This means they can intervene quickly if there are any issues that need resolving. Most clients prefer this level of guidance, especially first-time buyers in Spain and being able to keep clients up-to-speed during the application process is essential to ensuring things go as smoothly as possible. Our advice is to always check the credentials of any broker who is now offering mortgage advice in Spain.
What our clients may not always be aware of are the significant variations between the conditions offered by different branches or underwriting departments of the same banks. We have known of a bank’s credit committee in one region of Spain offering 10% less than its credit committee in another region. In addition, interest rates can vary by more than 0.5%. from branch to branch. In fact, one client was being offered a fixed rate of 4.5% when the broker could have secured a rate at around 2% with the same bank.
Latest on Fixed rates
We mentioned previously that following the introduction of the new legislation, some banks are no longer offering fixed rate mortgages to applicants earning in currencies other than Euros. Many clients have been asking to focus on lenders that definitely offer fixed rates.
For GBP earners wanting a fixed rate, there are only a few banks to approach. One of these usually insists on the client taking out a single-premium life cover policy, which many clients don’t like. Also, for British clients only, the same lender has reduced the maximum debt-to-income level from 35% to 20% and they have also reduced maximum borrowing for British clients from 70% to 60%. The result is that far fewer British clients can now qualify for a mortgage with this lender.
Despite the increased difficulty of qualifying with the above lender, for a standard enquiry and loan of around €200.000 the fixed rates are still very attractive at 2.15% fixed for 20 years, for example. Another bank offering fixed rates to British clients does not require them to take any life cover out and is offering a slightly higher rate at 2.65% fixed for 20 years, although we are usually able to secure a discount for clients.
For residents of America, Hong Kong, Singapore & the UAE/Saudi Arabia, Mortgage Direct can offer the same rate as above (2.15% fixed for 20 years) without the life cover. 25-year terms are also available, subject to status.
Mortgage Direct can achieve from 1.5% to 1.75% fixed for 20 years for the very best clients. Generally speaking, the shorter the fixed-rate term, the lower the interest rate.
If you are just starting out or have an urgent mortgage requirement please don’t hesitate to get in contact.
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