Is now the time to buy abroad, in SPAIN…..?

DSC06962353-62 (12)Property markets in much of Europe are in the doldrums so if you are looking to purchase a home overseas, now may be the right time to buy.

The increase in the sterling/euro exchange rate over the past few months has been welcome news to potential overseas buyers as the pound in their pocket goes further. Borrowing in sterling may be easier and cheaper at present but if the euro continues to fall, a loan in sterling could wipe out any potential gain made in the value of the property, as the relative value of the debt against the property (sterling converted to euros) would increase. The worse case scenario would be that you could owe more in sterling than the value of the property in euros. Banks lending in euroland will generally only lend in euros because of this risk.

Matching the currency of the property and the debt can offer some protection against exchange rate movements. If sterling continues to strengthen, the monthly cost and balance will fall in relative sterling terms. With very few exceptions, UK High Street lenders cannot take a charge on property overseas. A further benefit of using a retail bank in the country where the property is located is their local knowledge. The lender will carry out their own valuation on the property, giving you independent reassurance that you are paying a reasonable price.

How easy it is to obtain mortgage finance depends largely on location and nowadays will always be full status, with banks basing income on tax returns and applying their affordability criteria.

The competitiveness of interest rates tends to be determined by how many lenders are offering mortgages. Where competition is limited – or worse still where there is only one lender – the rate may be higher and there may only be one product. Fixed or capped rates are likely to be a wise move while base rates are so low, but these are not readily available in every country. Switzerland offers fixed products up to a maximum of fifteen years and US mortgages are often fixed for five years or longer.

Lending in Spain  is challenging as there are far fewer lenders than in the past and products tend to be limited. These products are often simple variable trackers with comparatively high initial pay rates.

Research in advance is vital to finding out what your mortgage options are. Before you visit a property you can obtain a decision in principle from a lender or specialist broker, confirming how much you can borrow and on what terms. A decision in principle is not binding and is subject to the valuation of the property, but will help put a potential purchaser on an equal footing with a cash buyer.

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About Us

Villas Valencia offers properties in Valencia at Spanish prices. What`s more, we don`t charge the buyer (as most other agencies do). We are an English locally run estate agent company dealing with properties in a picturesque area around the city of Valencia.

Testimonials

You are the only agent we dealt with your knowledge of the area and the buying process left us at ease that everything would be taken care of. - Mr & Mrs P, in Naquera

Your advice was clear and brilliant. You completely understood our requirements and objectives, facilitating our new purchase. Thank You! - Mr L, Now living in Lliria

You offered a great service from start to finish, clearly explaining all our options and helping speed everything through. You translated everything we needed quickly.

- Mr T, Second home in Montroy

Villas Valencia was fantastic and exceeded my expectations. I will and have recommended you to others. Thank you for all your referrals for building work. We love our new pool! - Sean, house in Rocafort

Thank you for all the help buying our property in Valencia. With so much to think about, you explained everything well and made it all very easy. Cant wait to move out there fully and enjoy a G & T on our balcony with you.

- Ben, house in Naquera

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