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Doom Gloom But Increased Demand For Spanish Investment Property

Brits looking for a Spanish investment Property don’t seem to be put off, despite the global economy being in the middle of crisis.

Some currency exchange experts are reporting that transactions for holiday homes in Spain have increased by 100% over the summer period of 2011. It hardly seems likely that we are returning to the property boom of the 1990s, however, having said that buying a property abroad is still fraught with danger if you don’t know what you’re doing.

This isn’t going to be a long blog post and if you don’t read any further than this paragraph, remember one thing:- Instruct a specialist and don’t try doing it yourself. Why? Because there is a really big chance that you will come unstuck.

It goes without saying that in this economy finding a mortgage is tricky, but there is evidence to suggest that Spanish and French banks will still lend to those with a substantial deposit. For instance, a figure of 15 or 20% seems to be useful as an acceptable guide. Proof of income and full exposure and liabilities are going to have to be disclosed as well as the aforementioned hefty deposits. It is also likely that you will need to have a great deal of equity in the family home to support any lending requests.

Example mortgage rates in European countries such as France and Spain are typically variable around 3 to 4%. However you can expect these rates to be negotiated depending on the amount of equity available for the proposed purchase.

For those choosing loans paid back in Euros, British buyers should be aware of any potential currency risks if their income is paid in £sterling. Many of these types of mortgages have variable rates applied so it is also important to factor in repayment rates that could vary significantly.

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