If you are thinking of buying an overseas property and obtaining a mortgage from a foreign bank to do so, the best advice that we at Movehappy can give you is to do your homework before you travel or risk making costly mistakes.
Most buyers assume that the process and costs in Spain, for example, would be the same as they are at home but they are not. At Movehappy we would recommend the use of a specialist international mortgage broker, and we have teamed up with The MHI Group, who, as well as operating in multiple countries worldwide, are an FCA accredited company who are able to assist with lending in the UK as well.
If you need an overseas mortgage, they always recommend that you try to source your mortgage as your first step in the process - there is nothing worse than finding your dream home in the sun only to risk losing it as you have not got your funding in place.
For Movehappy clients, The MHI Group offer a FREE pre-qualification service meaning that you know when you travel, what budgets you will be looking at. Most importantly, you have the means to relax and buy a place safe in the knowledge that your finance is pre-approved.
Unlike the majority of International mortgage brokers The MHI Group will not request any of their very reasonable fees up front, preferring to get the mortgage arranged first and foremost.
Their staff have many years of experience in both the UK and Spanish markets and have qualified staff in both countries. This experience, and the great relationships they have established with the major players in their field and the sheer volume of loans they place, allows them to get the best deals in the market and much better than an individual would get approaching a bank directly. They are also able to make demands of lenders that individuals couldn’t, including stripping out unnecessary and frivolous insurance products that lenders try to insist upon.
As an example, the typical cost of life insurance with a Spanish company can be up to 4 or 5 times more expensive than using price comparison sites in the UK. The lenders are not allowed to insist on linked sales but some make it very difficult to say no.
Mortgages in Spain have tended to be variable rates for quite some time, but in the last few years long term fixed rates have become popular. The below interest rates at the European Central Bank have allowed financial institutions to borrow at extremely attractive rates. A 15 year fixed rate mortgage would be available, for example from as low as 1.85% with just a few basic conditions. Fixed rates for up to 30 years are also available at around 3% (at the time of writing, Feb 2021).
The variable rate products can also be extremely cheap with the right lender. Most products are linked to the 12 month Euribor as an index and The MHI Group can get rates as cheap as Euribor +1.4% - the Euribor is currently -0.5%* meaning an actual pay rate of around 0.9% - that is cheap!
The MHI Group have been operating in Spain for over 15 years and during that time have seen a huge change in the market, but continue to go from strength to strength. If you are contemplating a Spanish Mortgage, they will be happy to assist.
Please do contact us at Movehappy to introduce you to the finance team. Please also feel free to contact us with any additional questions you may have about mortgages or anything else at all. We are always here to help and we look forward to hearing from you.