How it Works

The large discount available on the regular list of properties we have is the key to the whole no-money-down purchase. It is possible to have a mortgage arranged based on the bank true valuation of the property regardless of the actual selling price negotiated. This negotiated selling price agreed with the vendors is at its absolute minimum price allowing them to walk away with all their invested capital returned quickly. This price is obviously considerably lower than the actual value of the property.

Typically the banks will lend you a loan-to-value figure of 80%. This figure is 80% of the bank valuation figure based on what they think the property is worth if they had to resell it within a reasonable time – for example six months. In a normal purchase you would be looking at funding the extra 20% of the purchase price from your own pocket in addition to approximately another 15% extra for fees.

In our cases, however, due to the very low purchase prices negotiated with the vendors, the 80% advance from the bank not only covers our full purchase price but also leaves enough spare funds to cover all the solicitors and buying fees.

Here are two typical transactions that were carried out at the end of last year:

Example 1

LOCATION: Benalmadena
PROPERTY: 2 Bed 2 Bathroom Apartment
CONDITION: Newly Built
EXTRAS: Lifelong golf share for up to 4 people

Bank Valuation: €310,000 (approx £210K)
Jan 2004 purchase price: €254,000 (approx £172K)
Nov 2005 sale price: €216,000 (approx £146K)

80% LTV (Loan to Value ) = €248,000 (approx £168K)

Available to the buyer thus covering 100% of the purchase cost with remaining funds of €32,000 (approx £21.6K) for associated costs.

Example 2

LOCATION: Elviria
PROPERTY: 2 bed penthouse
CONDITION: brand new
EXTRAS: front line golf

Bank Valuation: €480,000 (approx £325k)
Mar 2004 purchase price: €347,000 (approx £235k)
Nov 2005 sale price: €295,000 (approx £199k)

80% LTV = €384,000 (approx £260k)

Available to the buyer thus covering 100% of purchase price with remaining funds of €89,000 (approx £60k) for other associated costs.

As with all property dealing, things can change and the banks are looking closely at this legal loophole in the market. However, as it stands it is still permitted, and that is why we urge anyone serious about buying in Spain to act quickly.

For more details please contact us through our enquiry page where staff are available to answer any questions you may have.

What we offer:

  • English-speaking property finders, mortgage consultants and solicitors.
  • UK and Spanish-based contacts to help your smooth purchase and answer any questions you may have.
  • Subsidised viewing trips to Spain with flights and hotel accommodation organised for you. Collection and drop off at airport in Spain. English speaking guide who will drive and accompany you on viewings and tours of the local area.
  • Contacts who have already purchased are available to answer any questions.
  • Regular contact on progress of purchase.
  • Post-purchase assistance, if required, with renting, furniture, etc
  • New properties available all the time within all price brackets.
  • All properties offered will only be of the highest standard, high specification, and often with 10-year builders’ guarantee.
  • We only deal with major developers backed by the banks.
  • All properties checked for full building regulations, permits and land rights.
  • New EasyJet airline route available from July 2006 between Glasgow and Malaga airports – good news for visiting your own holiday home, but also good for the rental market.

 

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