Buying a property in Spain

Clairey_2

Hi All

I am new to these forums and wanted to ask for any advice on buying property abroad. We (my husband and I) have been looking into purchasing a house in Spain with my parents and my brother (3-way split). My question is what would be the best (and cheapest) way to obtain a mortgage? We have a fair amount of equity in our house here in the UK. We would need to release about GBP 40,000. Or would it be more advisable to get a Spanish mortgage? This will be a holiday home and not a buy-to-let purchase. Any advice would be appreciated?

Thank you.

GW65

Clairey wrote:

Hi All

I am new to these forums and wanted to ask for any advice on buying property abroad. We (my husband and I) have been looking into purchasing a house in Spain with my parents and my brother (3-way split). My question is what would be the best (and cheapest) way to obtain a mortgage? We have a fair amount of equity in our house here in the UK. We would need to release about GBP 40,000. Or would it be more advisable to get a Spanish mortgage? This will be a holiday home and not a buy-to-let purchase. Any advice would be appreciated?

Thank you.

Can't advise on the mortgage, but I would recommend buying a "secondhand" property rather than an off-plan new-build. Quite simply, the latter are sold at inflated prices and you pay 75% of the cost of the property (in 3 stages) before the property is even built - some builders will start new developments before they've finished yours in order to maximise cash-flow... You can usually get far more for your money with existing properties (and in many areas it's a buyers market). One other thing to be aware of is that the resale market in some areas is on the dead side, since a high proportion of the people buying into the market are English/German and buying through property companies who tend to market new-builds. Not a problem if you're planning to own the property for a long time, but you have to consider it.

A_Fool_&_His_Borrowed_Mon

I Don't get the "Holiday Home" gimmick,

How many luxury Holidays staying at Luxury Hotels, renting top Villas, etc, could you have with 40k (80k with the imortgage interest added on) in your lifetime? One or two a Year?

I personally would only buy such a place if i was to live there permanently.

housebuyer_3

Hi Clairey, I have successfully used a mortgage broker in Spain (who I never met) - communication was via email and phone only and a local solicitor on the Costa Blanca where I was buying. You can find details for both these people here: Click here for link to Buying in Spain

housebuyer_3

A_Fool_&_His_Borrowed_Mon wrote:

I Don't get the "Holiday Home" gimmick,

How many luxury Holidays staying at Luxury Hotels, renting top Villas, etc, could you have with 40k (80k with the imortgage interest added on) in your lifetime? One or two a Year?

I personally would only buy such a place if i was to live there permanently.

Wouldn't you like to cash in and get your 40k / 80k back after 10 years?

Curley

housebuyer wrote:

Wouldn't you like to cash in and get your 40k / 80k back after 10 years?

Good point. Also, potential huge profits can be made by letting out the home when not in use. Thats if it's near the resorts of course.

Pobby

I am considering Spain but there is no way I would buy there at the moment.Like the UK property is in a huge bubble.Few Spanish can afford to buy as wages are lower there than here.I am going to wait and see where properties are values further down the line.

F_T_Buyer

You might be interested in this:

http://www.timesonline.co.uk/newspaper/0,,176-2357239,00.html

Mrs_pbradley936

I am not so sure that huge profits are available for holiday home rentals. Perhaps I am conservative or over cautious but to my mind holidays are treats to be paid for from money you already have rather than something you borrow for. In your position I would not borrow £40k and I would think long and hard before moving it if I had £40k sitting in a bank account.

PoorDave

pbradley936 wrote:

I am not so sure that huge profits are available for holiday home rentals. Perhaps I am conservative or over cautious but to my mind holidays are treats to be paid for from money you already have rather than something you borrow for. In your position I would not borrow £40k and I would think long and hard before moving it if I had £40k sitting in a bank account.

I thought the OP implied they weren't going to rent it out...

Maybe i misunderstood the OP and your post.

Clairey_2

Thanks so much for taking the time to reply. Thanks for the great links, too.

No, we don't intend to rent it out. We are looking at it more as an investment in the hope of future appreciation. Not necessarily to gain on a grand scale (but hopefully not to lose) and we will be looking at other investments alongside this. I don't at all expect it to see me through old age. With pensions being as they are, my thought was that a property investment would be worth considering.

Clairey