Buying a property has proven to be one of the most secure forms of capital investment that you can make as property values have always risen at a higher rate than inflation.
Your most valuable asset is probably your primary residence in the United Kingdom and this can provide the means of raising the capital for your ideal home abroad. Many find re-investing the equity they have accumulated in their home in the United Kingdom in a second home abroad to make sound financial sense.
You can also obtain a mortgage in Tenerife. The property you are purchasing will be used as collateral for the loan by the Spanish lender.
Generally non-residents can obtain up to 70% of the value of the property on a mortgage from a Spanish bank. Residents can obtain generally 80% of the value and in some cases even higher loan to values. Whilst all mortgages are subject to status Spanish banks are keen to lend to non residents who are aged 18 years or over and are looking to purchase a property in Tenerife.
Mortgage rates are very competitive with the United Kingdom and a wide range of financial products are available to choose from. These include traditional 'Repayment Mortgages' (with this type of mortgage you repay part of the capital each month along with the interest), 'Buy to Let Mortgages' and 'interest' only products. Loans can be repaid over a short period or long term, (dependent upon the age of the applicant).
Two things generally affect the amount that the Spanish banks will lend you:
- The purchase price of the property
- How much you can afford.
Your representative of Tenerife Royale Estate Agents S.L. will help you calculate the amount of any mortgage cost and assist you to plan your budget accordingly. Together with your bank manager, we will ensure that your repayments can be comfortably met and that your finances are not being 'stretched too thin'.
Surveying the Property: The Spanish bank will need to make sure that the property you are proposing to purchase is 'good security' for a mortgage. A surveyor (approved by the Central Bank of Spain) will be commissioned to provide a report on the general state of repair and condition of the property and provide a valuation (Tasacion) for mortgage lending purposes.
As already detailed (page 11) TENERIFE ROYALE ESTATE AGENTS S.L. can introduce you to the Bank Manager of one of a number of the major Spanish financial institutions. Your Bank Manager will provide further information and will be happy to discuss your individual mortgage requirements in order to assist you in every step of your property purchase.