My perspective on Spanish mortgages and Covid-19
There is no doubt that these times are very worrying for millions of people around the world. However, as I write this update today it is really uplifting to know – having spoken to numerous potential buyers over the past 2 weeks – that the spare downtime that some have available is being used positively and constructively with regards to re-evaluating (and re-enforcing) their plans, lifestyles and dreams for owning a property in sunny Spain sometime soon. So what will happen with the Spanish mortgage situation during and after Covid-19?
Many buyers I have spoken with have also expressed surprise that we as a brokerage and the Spanish banks are working to a “business as usual” policy during this extraordinary time – which in itself gives enormous reassurance that people are on hand to facilitate these future aspirations. For example, just last week I successfully submitted an application for one of my clients to one of the main banks on Friday 20th March, and the approval subject to valuation was received back on Wednesday 25th March – an amazing turnaround time especially by Spanish standards! The client was over the moon and didn’t think this was possible. What this tells us is that we and the banks are still able to work professionally and quickly to assist with the initial stages of the buying process here.
For example, just last week I successfully submitted an application for one of my clients to one of the main banks on Friday 20th March, and the approval subject to valuation was received back on Wednesday 25th March – an amazing turnaround time especially by Spanish standards!
Encouraging news from Spanish mortgage lenders on Covid-19
One of the big lenders today sent us a news bulletin with the following:
- Most Notary offices are still open for business as usual and signing mortgages where all parties can attend and are willing to continue (with obligatory, masks, gloves and own pen!)
- Yesterday our valuers also confirmed that they are continuing to attend valuations (there was some confusion on Monday). So as long as the key holder agrees, we can progress as normal.
This hopefully gives confidence that we can continue to operate as normal as possible. Business as usual from this end.
Most Notary offices are still open for business as usual and signing mortgages where all parties can attend and are willing to continue (with obligatory, masks, gloves and own pen!)
Returning to Spain with a mortgage offer in hand
Further feedback I have received from clients has included people that have been saving up for many years previously, and feeling aghast that at this last moment this problem has caused them to perhaps re-think. That is absolutely natural of course, but I always hear clients telling me that “we will return at some point” – and it does seem that the hunger and desire to seek a new lifestyle after the doom and gloom of Covid-19 won’t be diminished forever.
Myself and the amazing team we have here at Mortgage Direct are very well positioned to continue to help our clients start the preparation work for getting a Spanish mortgage to finance the dream again right now. Why wait?
Three reasons why you should start your property buying process right now
It is vital to do research and homework in advance of physically going to look at a property for various reasons.
Firstly, when the travel restrictions of Covid-19 are lifted (and they will be), and life returns to normality we expect from what our collaborators such as estate agents are telling us, that there will be a rush of buyers flooding the market once again. Various agents have told me recently that they have a pipeline of buyers ready to come over to Spain at a moments notice as soon as they are allowed to. If you are one of these people then you could very well be competing for the same property with other buyers. What we know from feedback is that vendors and agents are hugely more receptive to those clients that have taken the time to organise their mortgage finance upfront and have proof to show. It gives you a significant advantage over somebody that just assumes they will be alright.
Secondly, it saves you as a buyer so much stress and time. When you arrive in Spain you want your focus to be solely on the property and location of your dreams. The last thing you want to be doing whilst here is rushing around trying to secure finance to prove to the agent or buyer that your offer is sound. The paperwork and proofs that the banks ask for can be extensive, and of course if you are in Spain it can be a logistical nightmare, and very time consuming trying to back pedal and organise this from your home country. We know from experience, clients that have approached a bank directly never hear back on this for weeks, and by which time they have lost the property that was their number one choice.
Thirdly, of course an initial approval provides you with a clearer understanding of your repayments and costs, as this is usually fully explained and broken down when the document is ready to be issued by the bank. Our job is to help you understand these terms and answer any questions or issues you may have resulting from this. At this stage you should have the reassurance that you are on the right track with your finances and everything remains affordable.
What we know from feedback is that vendors and agents are hugely more receptive to those clients that have taken the time to organise their mortgage finance upfront and have proof to show. It gives you a significant advantage over somebody that just assumes they will be alright.
We are here to assist you throughout the Spanish mortgage process
Rest assured, that initial approvals in Spain are usually valid for 2 to 3 months generally, but they are very easy to renew with our assistance. Mortgage Direct has privileged access to our banking contacts and our ability to always review the best terms and conditions in the market ensures that we save our clients stress, time, and of course money!
So, in signing off, I hope that the above information provides perhaps some encouragement and positivity to keep the dreams and aspirations alive – there is so much to be positive about and I am sure that owning a property in sunny Spain still awaits you. Myself and the team at Mortgage Direct look very much forward to helping you right away!