Mortgage Direct, Spanish mortgage provider.

Welcome to our March newsletter. Last month we announced that we had been accepted onto the UK’s Financial Conduct Authority (FCA) register. This month we can report that one of our advisers is now licensed to offer UK mortgages, including UK buy-to-lets.
If you have a client who has been declined a Spanish mortgage or who has a shortfall on the deposit for a Spanish property purchase, the solution may be to release equity from their UK property. Although many banks prefer that the deposit does not come from borrowed funds, some are open to it for clients with good profiles and who pass the affordably checks. Alternatively, if the client borrows all the purchase funds on their UK property and comes to Spain with cash in their hands, this can be attractive to the seller and a lower price may be negotiated due to the potential for a quick sale.
Hot news: re-mortgages now being offered! 
We have just heard from one of the banks we work with that they are now offering re-mortgage products to non-residents. If you have clients who have signed a mortgage with an interest rate higher than 2.50%, they may be able to switch providers. The new bank pays the costs of the new mortgage - the valuation, registry, notary and gestoria fees. We had been expecting this to come now that the bank has to pay the AJD tax on the mortgage and other associated costs, meaning that the client doesn’t pay these costs twice. We haven’t submitted a case yet as the announcement was made at the time of writing. Let’s see if more banks follow suit...
Welcome to our February newsletter. Last month (January 2019), we received the highest number of enquiries in a single month since Mortgage Direct was established in 2006. Property prices are still low, borrowing is incredibly cheap at such low interest rates and with lower than ever mortgage costs, now is a great time to buy and take out a mortgage. Whilst the uncertainty of Brexit still looms large for our British buyers, we are now starting to experience such buyers wanting to purchase before the outcome of Brexit is decided, as they feel prices may jump once there’s more certainty in the markets.

Spanish mortgages becoming regulated

We are often asked if and when Spanish mortgages will become regulated. We feel this will be imminent. The European Union has fined Spain for having a system which can still be abused by the banks. The Bank of Spain has had to make an amendment of the proposed mortgage regulation, which has now been approved by the Parliament (Congreso de los Diputados), but which still has to be approved by the Senate (High Chamber).

So what would change? Basically, there would be more protection for the borrower and they will have a financial ombudsman to complain to should they want to make a complaint about the advice they have received. In the initial process, the mortgage adviser will have to provide certain documents to the client explaining why the advice has been given (based on their profile) and to explain fully the mortgage costs, taxes, mortgage conditions etc. 

As a company, we have always welcomed regulation and we feel it will clean up the industry in Spain and get rid of the rogue mortgage advisers still out there. We set up Mortgage Direct having come from the regulated system in the UK and we’ve followed UK principles ever since. We request that our UK advisers are CeMAP qualified (or if not, they commit to doing the training and sit the exams to get the qualification).

Two of our advisers are now based in the UK and, for this reason, we have had to go through the necessary compliance and due diligence procedures to become regulated there, so that they can advise on Spanish mortgages from UK soil. We’re pleased to confirm we have now been accepted and are now on the Financial Conduct Authority’s (FCA) register. What happens when (or if) Britain leaves the EU we don’t know, but we can’t see the regulation system disappearing.

Major banks tell us we are their leading introducer of mortgage business in terms of the quantity and quality of client profiles we submit – we are the leading independent mortgage broker in Spain. The number of our clients defaulting on their mortgages is very low compared to other introducers. For these reasons, our clients are given priority treatment and offered better conditions.


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