There are two main categories of customer “Full Status” and “Non Status”. Most
banks in Spain will only work with “Full Status Customers”, but there are now
some who will also offer
Spanish mortgages to “Non Status Customers”. The difference
between status and non status is in the ability of the customer to verify to the
banks satisfaction their ability to make the repayments. A full status customer
will be able to provide good supporting documentation that verifies income and
current liabilities and the customer will have no bad credit history. These full
status customers can get the best deals, lowest interest rates and higher LTV;
that is a bigger percentage of the property value will be provided as a mortgage
so the customer puts in less cash. Currently “Full Status customer can get up to
80% of the valuation of the property.
The “Non Status Customers” do not have to verify their income with
documentation. No income verification and a bad credit history will mean they
get less LTV and possibly have to pay higher interest rates. Typically at the
moment, for non status the LTV is 65% of the value of the property. Although
the non status customer does not have to verify their income the bank will still
want to be satisfied that the customer can make the monthly repayments and
will ask the customer to confirm in a statement that they have sufficient income
to maintain the mortgage. This statement is known as “Self Certification of
Income” a mortgage on this basis is generally referred to as a “Self Cert
Mortgage”.
Spanish Mortgage Misconceptions
Most people believe that if a bank has adequate collateral then they should lend
the money irrespective of the customer’s ability to make the monthly repayments. This is just not the case. The most important part of a mortgage for
a bank is NOT the security provided by the house but the monthly repayments. A bank’s preference is that the payments are made on time and for the full term
of the mortgage. A bank will monitor their mortgage customers’ repayments and if they accumulate a lot of bad payers and a lot of repossessions then the bank
will be unable to continue in the mortgage business. The monthly repayments are more important to the bank than the security of having the house as
collateral. Ideally the bank would like to see the agreed monthly payments made over a long period of time, the longer the better, so a 20 year mortgage is
more attractive to a lender than a 5 year mortgage.
For Spanish mortgages
contact Olg mortgage specialists.For Information on a mortgage in Spain click
the following link: Spanish Mortgages Spain100 % Mortgage rates from just 3.9%
