11.26.07
Posted in Canary Island property mortgage at 6:15 am by admin
When it comes to making a major buying decision, most of us follow a pretty typical pattern. We have an idea about what it is we want to end up with and we then begin a process of researching, viewing, comparing and evaluating, which can take days to weeks or even years, depending on the importance of the decision.
It seems strange then that a great many people will actually take longer deciding which pair of shoes to buy from which shop, than they will deciding which mortgage to take from which bank, to pay for the overseas property they have spent months finding.
In addition, the majority of people applying for a mortgage for their overseas property are so pleased when they are offered a mortgage to fund the purchase of their dream place in the sun, that they willingly accept the offer they receive without questioning whether it is the best deal available or the most appropriate terms for their own personal circumstances.
Now, in some cases, the first offer you receive may well be the best available and most appropriate for you, but this feature highlights one particular couple’s journey through the mortgage maze and how much things can sometimes change, if you are prepared to put in enough time and energy.
Background
Mr & Mrs X agreed to buy two off-plan houses in the Lanzarote 2 years ago, putting down a 30% deposit on each one. They had decided that the best option for their circumstances would be to borrow as much money as they could, whilst keeping their monthly repayments as low as possible as they wanted to keep their capital for other purposes.
At the time of paying their deposits, they spoke with a bank, which we shall call bank A, which had been recommended to them locally. They met the manager, discussed their purchase and their requirements and were told verbally that the bank would offer them 70% of the valuation which would be carried out at completion in two years time.
With the market in the Canaries being as strong as it is, they had every confidence that the valuation on completion would be significantly higher than the purchase price, meaning that bank A would lend more than bank B, who were the developers bank, who would only offer 70% of the purchase price.
They felt happy with what they had been told so returned home and forgot about mortgages as their houses would not be ready for another 2 years.
2 years on
Fast forward 2 years and Mr & Mrs X are now ready to take title of their 2 houses, however, as often happens with new builds, the houses are a couple of months behind schedule. They check with bank B, the developers’ bank and are told a new valuation has been done.
They were delighted to find out that according to bank B,s new valuations, one house was valued at 26% higher than the purchase price with the second 30% higher. They were not as delighted however to find that bank B would still only lend 70% of the actual purchase price.
They returned to bank A, told them of the new valuation amount and asked if they could borrow the previously stated 70% of the valuation amount. Bank A said they could not accept bank B,s valuation and would need to conduct their own valuation.
Having been told this would only take a couple of days they were starting to get concerned over the two weeks that it actually took as the completion date was now looming closer. The figures when they arrived however, valued the houses at 32% and 38% respectively above the actual purchase prices.
So far things were looking good but also everything so far was only verbal and completion was now only about 4 weeks away. They asked for the offer in writing along with a copy of the mortgage terms. It was at this point that they began to get concerned. Despite constant chasing and constant promises, bank A began letting themselves down badly by not following through on their promises.
At this point, Mr & Mrs X felt they had no choice but to speak to a third bank to try and secure the deal they wanted. Bank C agreed to lend 70% of the valuation amounts, but again, wanted their own valuation, but knowing how high the valuations were coming in, Mr & Mrs X felt confident this time they would get what they were looking for.
A third valuation was done, this time however they came in at only 9% and 19% higher than the purchase price. To add to the disappointing valuation figures, bank C also confirmed that as two mortgages were being taken out, they would lend 70% of the valuation of one, but only 60 % for the second one.
During this process, Mr & Mrs X were completely open with the banks they were dealing with. They told each bank they were talking to others and would let the banks know what they had been offered. They were not endeavouring to play one against the other but each time merely said “Well, its up to you to offer us the best deal you can and when the offers are in we will decide what is best for us”
Bank B then decided they could in fact offer 70% of the valuation amount, with an agreement to accept the valuation from bank A, if it was higher than their own. They would however only lend over a maximum of 25 years. Meanwhile, although bank C,s valuation was low, their terms were good and included a 35 year repayment term, part of which was interest only meaning the monthly payments would be lower.
By this time, the Notary date was getting much closer and bank A had still not confirmed their offer or terms in writing, so the decision was made to keep hanging on and wait for them as their verbal offer was still the best even though bank B had by now agreed to offer 70% of bank A,s higher valuation on both properties.
Bank C were also still trying to stay in the game so offered to increase the amount they would lend on one property from 70% of their own valuation up to 80%, but would still only offer 60% on the second. This started Mr & Mrs X thinking about whether they should actually split the mortgages between 2 different banks as bank C,s offer was very good, but only on one house. So, keeping to their word, they spoke openly to the banks about their thoughts about splitting the mortgages at which point bank B put forward yet another offer, which included an interest only period, but only for both mortgages.
By this time the Notary date was being counted in days and hours and they had still not received written confirmation of the offer and terms from bank A even though this was still the one that in theory was the best deal for them due to the high valuation given.
They still held out their decision awaiting final confirmation from bank A which came in at the 11th hour. The confirmation however was for only 58% of the valuation figure, not the 70% they had been expecting for 2 years. This threw them into something of a quandary but by this time banks B and C, aware that the Notary date was fast approaching, were phoning every day to try and secure the business.
Finally, Bank B made their 5th offer, which extended the mortgage period from 25 years to 35 years, which reduced the monthly payments significantly. The only condition was that they would lend 70% on both houses, but the amount loaned was to be based upon bank B,s own valuation and not Bank A,s as previously offered. This however still gave Mr & Mrs X the amount they had been looking for all along.
So, now the dust has settled how has this affected Mr & Mrs X in real terms? Well, they wanted to borrow as much as possible whilst keeping the monthly payments as low as possible. In real terms, bank B increased the amount they initially offered to lend by some 86,000 Euros. They also eventually offered to increase the term by 10 years which reduced the monthly payments by over 300 Euros.
The table above shows just how wide ranging the various final offers were and also how wide ranging the valuations were, with the difference in real terms between the lowest and highest valuations amounting to some 93,000 Euros for the two houses.
Quite amazingly in this case, it was only really bank A,s incredibly poor customer service that led to the buyers feeling the need to shop around in the first instance. Mr & Mrs X are now very happy with the deal they have secured and have learnt a huge amount over the past few months and whilst the process was at times very frustrating they have achieved precisely what they wanted. They had no previous experience in dealing with Spanish banks and put their success in ending up with what they wanted down to having a clear idea of the deal they wanted and having the ability to simply say “No thanks!” when the offer wasn’t right for them.
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Posted in Canary Island property rentals at 6:03 am by admin
Four out of Five holiday makers prefer it!
If you have been wondering whether investing in a property for rental in the Canary Islands would be a wise investment, you need to pay close attention to where the majority of holiday makers are looking to book their holidays.
In the past, it was difficult if not impossible for the average person to be aware of demands for holidays in certain areas, but with so many people now using the internet to arrange their holidays its relatively simple to have accurate up to the minute data of what people are looking for.
Looking at this information, one thing is clear, holiday makers looking for a break in Spain are definitely opting for the Canaries so rental property owners and budding rental property owners take note!
Many people, who have not lived there, believe that mainland Spain has lovely warm weather throughout the year, but that really isn’t the case. Every part of mainland Spain experiences winter to some degree and many popular tourist areas actually have periods of weather that are not much different from the UK, with the weather patterns worsening the further inland you venture from the Mediterranean coast.
The only genuine all year-round sunshine within Spain is to be found in the Canary Islands, and holidaymakers are now very clearly aware of this fact as a recent report on on-line searches shows. During October this year, four out of the top five searches for holidays to Spain were looking for Canary Island breaks.
Gran Canaria was most popular, followed by Tenerife. The Costa Blanca was the only mainland Spain region to appear in the top five coming in at number three, but then Lanzarote and Fuerteventura completed the top five places.
These results should be of interest to anyone considering buying a rental property anywhere abroad. While mainland Spain is by far the most popular location for holidaymakers during the summer months and it’s possible to earn good rental income during peak season, if you’re looking for year-round rental income the Canary Islands are still the best option.
As well as the traditional holidaymakers spending just a week or two away, there is a growing market for retired people from the UK desperate to escape the British climate and high heating bills for two or three months over the winter.
Whilst fashions may change and new property markets may come and go, there are two certainties; ultimately people will always want to holiday somewhere with guaranteed good weather and the Canary Islands will always have the best weather record in Europe!
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11.09.07
Posted in Canary Island property at 2:25 am by admin
Freedom4sale have made a reference library web site for finding property for sale information fast on all the Canary Islands.
For Canary Island property buyers in Ireland and in the rest of Europe we are putting together a great web site for finding property information on all the Canary Islands including Tenerife, Lanzarote, Fuerteventura and Gran Canaria.
The web site has Canary Island tourist information with a lean towards the property buyer. So before going to a certain part of the Canary Islands check out this new site and get an idea if it is the sort of place you would like to buy or rent your apartment, villa, finca or new development.
The new Canary Island property for sale web site not only has information on Lanzarote, Tenerife, Fuerteventura and Gran Canaria property but all the main property and tourism areas within each island. These are the areas where you would be most likely to get a good rental income on your new property when you are not there.
The main areas on Lanzarote to buy your new investment property are
Puerto del Carmen
Playa Blanca
Costa Teguise
Arrecife
Matagorda
Puerto Calero
Tias
Yaiza
The main areas on Tenerife to buy your new investment property are
Fanabe
Chayofa
Callao Salvaje
Arona
Amarilla Golf
Adeje
Golf del Sur
Las Americas
Los Cristianos
Playa de las Americas
San Miguel
Torviscas
San Eugenio
El Palm Mar
Costa del Silencio
The main areas on Fuerteventura to buy your new investment property are
Corralejo
Caleta de fuste
Antigua
Costa Calma
La Oliva
Nuevo Horizonte
Parque Holandes
El Cotillo
The main areas on Gran Canaria to buy your new investment property are
Maspalomas
Playa del Ingles
Puerto Mogan
Puerto Rico
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11.06.07
Posted in Los Cristianos property at 8:03 am by admin
Los Cristianos grew out of an old fishing village in the Arona district. The onset of tourism to the area has changed things in a big way and in return expanding the property and tourist accomodation market rapidly. The average cost of an apartment for sale in the Los Cristianos are is 211,000 euros. Most apartment in this area are to be found on complexes of about 5 floors surrounding a swimming pool with other ameinities and bars. As with all popular areas for property Los Cristianos has many estate agents all capable and happy to help you find the right apartment, villa or flat to suit your needs.
Los Cristianos is situated 15 kms west of the southern airport (Reina Sofía).This is without a doubt one of the most popular resorts on the Canary Islands. The artificial beaches are very nice and it has a wonderful harbour that offers fishing trips, pleasure cruises, glass bottom boats, diving excursions and ferries to La Gomera.
Tenerife features the lowest temperature difference between summer and winter for anywhere in the world. Our weather occasionally includes rain, but there is no specific rainy season. Air conditioning is quite rare, with overhead fans usually providing sufficient air movement to stay cool, even at the height of summer. The minimum and maximum annual average air temperatures in Tenerife are about 15C in winter and 24C in summer. Therefore we enjoy wonderful weather in one of the worlds best and most delightful climates. The Island offers a surprising variety of micro-climatic weather zones, enabling people to almost choose their climate, depending on where they live. The Trade winds, together with the refreshing Gulf air currents, are the major weather factors that contribute to Tenerifes climate. The great altitude of Mount Teide gets up to three months of snow - yet it is still possible to enjoy a swim on the beach within an hours ride. The coastal areas enjoy the most sunshine, the best weather, the least clouds and highest temperatures.
Property for sale in the Los Cristianos area of Tenerife is seen as a good investment. Use one of the great estate agents to be found in Los Cristianos and you will be surprised at how much you can afford.
In the whole of Tenerife, Los Cristianos has the biggest property market. The next largest area for property for sale in Adeje.
The average price for an apartment bought from an estate agent in the Los Cristianos area is currenly 211,000 euros. On the freedom4sale.com web site you can currently search through 1024 properties on the market for sale.
In the Los Cristianos area there are over 14 estate agents selling property on the freedom4sale web site.
Find out more about Los Cristinos property for salefrom this link.
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Posted in Property in Las Americas at 7:50 am by admin
Playa de Las Americas in the busiest resort in Tenerife. It is only 15 minutes from the south Tenerife airport.
The property market in the Las Americas area is very big as is the demand. The average apartment for sale in Las Americas will cost you around 200,000 euros. This will probably be on a complex with plenty of amenities including swimming pool and bars.
You will find plenty of estate agents in Las Americas that will be happy to show you around apartments, flats and villas in the area. If you need any advice on mortgages, moving to Tenerife, banking and taxations laws they will be able to help you.
Playa de las Americas is a purpose built resort, started in the 1960’s and designed to have everything you require, such as bars, beaches, nightlife, restaurants and shops, near to your hotel or apartment. The largest resort in Southern Tenerife.
Playa de las Americas is more brash than it’s smaller and more peaceful neighbour Los Cristianos. With signs such as “English Pub”, and “No Spanish Food Sold Here” says everything you need to know if you will love or hate this very popular resort, with its English breakfast at noon, sunbathe and swim all afternoon, drink and dance all night culture.
Playa de Las Americas Beach is a tourist Mecca built at the end of the 1960’s. It is adjacent to Los Christianos and the Adeje Coast locally know as Costa Adeje. Virtually free from the Canarian culture, it is a place where many people from northern Europe frequent throughout the year (higher in winter) due to its favorable geographic location and what some call eternal spring time. Recognized as a budget destination for some and up market for others, the now slang named Las Americas has been the primary destination for millions of European tourists for over 2 generations. Youngsters who came as adolescents who are now mothers and fathers have their sons and daughters visit Las Americas to repeat their youth and due to the safe and secure nature inspired by local authorities and local councils. Massive development has allowed Las Americas to constantly reinvent itself over the years from the heady booze and fun vacations of the 80´s to today’s pedestrian quarters lined with first rate hotels and restaurants. A mix and match setup that appears to appeal to all segments holidaymakers and vacationers alike.
The property market in Las Americas offers both a good investment and good rental potential for tourists wishing to take advantage of the year round great weather.
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