Abbey National, who are soon to be renamed and re-branded Santander, completely in reverse to all other Spanish lenders (who are tightening criterias, lowering loan to values and increasing margins) are offering 80% loan to values at 1.25% above Euribor for Spanish mortgages.
This offering is somewhat strange as if you access Santander in Spain via their branch network the maximum loan to value is 70% with most only being approved at 60%. Why the two parts of the same bank have very different offerings for non-residents buying in Spain is a mystery.
Abbey National from their mortgage call centre in Bradford will only deal direct with clients so the broker market both those based in Spain and brokers based in UK are precluded from placing clients or being a position to explain the product and its features to their clients.
Abbey offer to explain everything necessary to the client but given the obvious lack of a link with their Spanish owners it is debatable whether the staff dealing with the mortgages are suitably experienced to ensure a client does fully understand the obligation they are taking out and how it works.
Clients with an existing Santander loan who are unhappy with the product and state the full implications were not made clear when it was taken out often contact me. This included no explanation of how the mortgage worked and adding of compulsory products embedded in mortgage deed, which were not explained at offer. Whilst these issues will be from mortgages arranged via the Spanish Network one does wonder how much better the UK counterparts will be.
Overseas lending even if taken direct from the bank based in UK does not fall under FSA scrutiny and whilst I am sure Abbey would not take advantage of this fact it should be borne in mind by clients. Taking the loan from a UK based lender provides no more protection than using a mainland Spanish Bank
One crucial question that should be asked is if the loan will be registered in UK and shown on UK credit files. At present, this is not the case with other Spanish Lenders and only Scottish Widows who have since withdrawn from market used to do this. It is one of a number of important factors that should be understood before signing.
Whilst it is not yet widely marketed the loan offering from Abbey National should be considered when thinking of buying in Spain. It is by far the market leader in terms of features and overall pricing and should form part of every client’s research.
How efficient they are; how much they understand about requirement in Spain to protect clients deposit monies; which unlike the UK are non refundable; and how stringent their risk criteria’s are and therefore how many clients they actually approve remain to be seen. Time will no doubt tell. Giving themselves a fall back position of another lender may well be a sensible route for all clients just in case the upfront offering does not live up to expectations.
Abbey can be contacted on 01274 742781.
More information on Abbey Spanish Mortgages