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Case Study: Friends From Two Different Countries Buying Off-Plan

Introduction: New Build for High Net Worth individual

We were approached by a High Net Worth individual (HNW) who wanted to secure finance over a new build villa in the Balearics. The client was not willing to place additional assets under management (AUM) and preferred a mortgage in Spain, fixed for the longest possible term with a minimal amount of additional product requirements

The Transaction

There was a lot to deal with, as not only were we dealing with an extremely complex client profile, but also a new build property where there were a number of licencing issues we had to overcome to make sure the timing of the financing coincided with the completion of the property. During the process, we liaised with the bank, lawyers, valuers and the developer to ensure a successful conclusion. We also had to deal with the introduction of new mortgage legislation in Spain, which meant that only a handful of banks would offer fixed rates to non-Euro earners at the time.

There was a lot to deal with, as not only were we dealing with an extremely complex client profile, but also a new build property where there were a number of licencing issues we had to overcome to make sure the timing of the financing coincided with the completion of the property. During the process, we liaised with the bank, lawyers, valuers and the developer to ensure a successful conclusion.

Buyer profile

Our client had an income structure that many banks in Spain would find difficult to understand. The client received a relatively low salary and certainly not enough to satisfy the bank’s affordability criteria, especially considering other worldwide personal debt. However, there was other income received via director loan repayments or dividends received from different companies around the world. Our experience with similar transactions meant we were able to work with our bank contacts to help them understand the true income received in order to satisfy affordability criteria.

Within a few weeks we had full bank approval for a 60% LTV mortgage, fixed for the full term of 20 years @ 1.55%, with the only additional requirement being that the client purchased the bank’s buildings and contents insurance.

New Build Solution: Bank approval within a few weeks

As with all large transactions, the case had to be approved by several different risk committees within the bank. Within a few weeks we had full bank approval for a 60% LTV mortgage, fixed for the full term of 20 years @ 1.55%, with the only additional requirement being that the client purchased the bank’s buildings and contents insurance. Due to delays with licensing the property, the initial offer expired, but we worked closely with the bank and our client and oversaw another successful application to the bank, at no additional charge to the client.

The Conclusion: New Build Mortgages

New Build mortgages can be difficult to achieve – even more so when you have a complex profile.  Via our network of trusted and specialist contacts at banks in Spain and beyond, we can help you achieve your financial goals in Spain. With so many years of experience in the market, we understand the purchase process in Spain can be painful at times. We aim, therefore, to make the process as hassle-free as possible and will liaise with all parties throughout the process in order to reach a successful outcome.

Key Characteristics

  • Client: High net worth individual
  • Property Location: Balearic Islands
  • Purchase Price: €4,450,000
  • Mortgage Required: €2,670,000