Spanish Equity Release Mortgages
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Spanish Equity Release Mortgages

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Sunday, 28 Sep 2008

Equity Release Mortgages in Spain

Spanish banks have only relatively recently begun to offer equity release products to their clients. Prior to this an equity release mortgage was deemed either unusual or risky. This was typical of the attitude of many Spanish banks who are considerd more risk averse than many of their European counterparts.

Finding such products let alone qualifying for them was difficult. Now however most Spanish banks have some type of equity release product available.

The bank will want to know why you want the release of equity, i.e. what is the money for. This will form a large part of the decision. Whereas in the UK the process was frequently a formality, with some form filling before receiving your cheque, in Spain the lender will come under deeper scrutiny.

For example you may have to provide up to a years worth of paperwork showing you have kept up to date with your existing mortgage. Late payments or other irregularities will not favour a positive decision.

Proof of income is also required along with the usual identity papers (passport, residencia) as well as the deeds of the property or escritura. you may also be asked to provide tax returns.

How much you can borrow will depend upon the value of your property, your relationship with your bank and your level of income. Rarely do banks approve an equity release greater than 50% of the property value.

Recent Developments

The advent of the credit crunch and the slowdown in the property markets has seen many Spanish banks revert to type and mortgage products (indeed any credit) appears to be harder to qualify for.

Even so, the same principles apply and the first point of call will no doubt be your existing Spanish bank (assuming you have one, otherwise get a recommendation from a friend or do some research). Make sure your paperwork is in order and give them as few reasons as possible to deny your application. For qualified financial advice including all types of mortgage application, we recommend you consult a local independent professional such as Eguzkiza Solicitors.