Mortgage for Property in Spain

JamJar

Hi.

I’m looking for a bit of advice and some resources on getting a mortgage for a property in Spain.

About 3 years ago I helped my sister out. I put around 15000euro equity in to a property my sister wanted to buy in spain – she’s lived there for years and has a residencia.

The property was worth around 120,000euro at the time and I have a ‘legal title’ to my proportion of the property.

In her infinite wisdom my sister took out a 100% mortgage and gambled that the market would rise, and we intended to sell about now – clearly it hasn’t and my sister is now in arrears and has messy financial affairs (that have all come about in the meantime) that I won’t go into.

I want to protect what is left of my equity and would like to get her to sell the property to me at a realistic market price – minus the proportion of equity that I have left in it. My sister would be cool with this … it’s just whether the bank would be…

1. Do you think the current mortgage bank would entertain this proposal – it would leave my sister with outstanding debts that she would have to clear with the bank.

2. Any good websites for finding out what my options are for getting a mortgage on the property if my proposal turns out to be acceptable.

Cheers.

JJ.

Conrad

The Bank probably wont let her sell. The 'equity' is the Banks, as effectively there is no equity - it's all loan.

If you lend me £10,000 and I give you a £10,000 property as your security and I then want to sell the asset, you will want your full £10k back and would not allow me to say give £1500 of it to a third party that claimed to have once leant me some money.

Not what you want to hear, but the only likely answer is for her to sell in 5 years or so when prices have recovered some.

JamJar

Thanks Conrad ... but what about the legal title I have to proportion of the property - it was done tied in with the money/equity I put in? Doesn't that count for anything?

JJ

Conrad

JamJar wrote: »

Thanks Conrad ... but what about the legal title I have to proportion of the property - it was done tied in with the money/equity I put in? Doesn't that count for anything?

JJ

It does, it entitles you to 15% of the property. If the loan is £100k, and the value is £100k then in practice there is no money for you now. No Bank could possibly allow a situation where they 'take a hit' by only getting £85k of the o/s £100k back.

If the property goes up to £115k, then and only then can you get your £15k back (after selling costs).

I knows it's gauling for you, but I would'nt fall out with your sis over this. £15k is a small amount over a lifetime, and tbh many many people are in the same boat. If your sis' plan had worked, you would have been pleased with the profit.

Back in 2005 I used to write all them time about not buying in places that had already had a boom such as Dubai and Spain. I used to be told I was being negative.
The thing is, like any gold rush people become irrational. I used to get raised eyebrows at BBQ's and so on when I said a crash was imminent - the usual tone was 'how can prices crash, there is'nt enough property, and too many Poles want to live here'.

The lesson in future is NEVER FOLLOW BANDWAGGONS - think the opposite of others - sometimes.
The place to invest now btw is Morocco, but most people laugh at this - as ever they follow crowds and cant see around the bend. The place to invest in Morocco is SAIDIA

JamJar

I didn't do what I did primarily to invest .... I was helping my sister out with some unfortunate personal circumstances. She's lived in Spain for over 25 years now.

She can't seem to get herself out these circumstances and I'm in a position to take this on ... however I'm not prepared to take on her ever increasing debts.

I'm not saying the bank should take a hit - my sister will have to cover the shortfall against other assets or take out a personal loan.

JJ