Spanish Property Investors Struggling

Spanish property investors are struggling with their mortgages according to the latest reports. Many law firms are reporting that they are seeing an increasing number of property investors approaching them for help on remortgaging their Spanish real estate or renegotiating their deals.

Thanks to the current economic climate, many property investors in Spain have seen their mortgage rates double and this has left some property investors struggling to meet their mortgages. For those who are unable to meet their mortgages, they face their properties being repossessed. If a property is repossessed by the bank and the sale price does not cover the cost of the mortgage, interest and costs, the bank is permitted to claim against the property owner for the difference in price. In the case of foreign property investors, Spanish banks will be permitted to issue proceedings in the property owner’s home country.

Should a Spanish investment property be repossessed, the owner is also likely to be put onto a blacklist for six years, making it difficult for the property investor to get a mortgage in Spain in the near future. In the case of UK property investors, Spanish lenders are currently looking at ways of co-operating with UK credit rating agencies with a view to passing default information on.

As with any mortgage, should property investors feel unable to meet the mortgage payments it is important to contact the lender as soon as possible – even before they have started to make late payments – as the lender may be able to offer advice or deals and will be much more amenable if the borrower approaches them before they start defaulting.

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Read our free guide on the Spanish property buying process

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