If you are buying your dream home with a mortgage from a Spanish bank, you should be prepared as the process will take some time and banks will be extremely strict with having all documentation in place. Preparing early and having your mortgage in place, will make the process much easier and give you peace of mind.

Buying property

The bank in Spain will typically request that you submit specific documents with your application, although a dedicated person from the bank’s customer relations will help you throughout with your documents and make all the necessary arrangements.  It is usually expected that you will provide a copy of your passport, proof of address documentation such as a utility bill, an NIE certificate, if you are employed, they will need at least 2 of your last wage slips, your annual tax statement, and 2 annual tax returns, last 2 years annual accounts, an accountant’s or employer reference, credit report, last 3-6 months bank statements, mortgage or rental agreement relating to the main residence. Whatever they require, they will first assess it and then they might respond with potential questions. After this, they will offer you a provisional approval on the condition that your property is valued, and it corresponds to the amount you are asking. The valuation takes a week. The bank branch submits your application to their risk department for a final approval which will be provided in writing.

Building a house

A similar process is followed if you are building  a house, as the value of your land and projected costs for a house will be assessed and cross-checked by a professional surveyor who will visit the location and provide their valuation to the bank.  By this time, you will need to have had architectural plans approved by the building authority and have a general estimate of your overall costs, so you present the bank with a clear and realistic number. If you do not manage to do so, this will create delays and more paperwork, so it is good to have a clear communication with your bank from the start and understand what is needed. Whether you are signing your contract with the bank or an independent third party will evaluate your property, you will be required to cover the costs. This will also include any fees for lawyers, especially if you do not speak the language, as the bank will arrange for a lawyer to be present to translate any papers you need to sign.

Total costs

The total costs of buying a property with a mortgage could be around 3%, as you will have to pay an arrangement fee (1% of loan as standard), valuation fee (approx. €500.00) and mortgage stamp duty (around 1.1%).

The interest rates in Spanish banks are attractive and relatively low, with an average rate around 2.75%. It is important to consider that banks now might offer a loan that covers only 60% (non- residents) to 80% (residents) of the purchase price or of the appraised value of the property (the lowest value prevails).

When buying a finca or rural property the maximum mortgage will be 60%. The rest you will have to finance yourself with your own resources, whether that means you need to increase your mortgage in your home country or with personal savings.

Spanish banks also take into account your family situation, whether you rent your home or have your own property, number and age of children, type of work, income, etc.

When applying for a mortgage in Spain, banks will look at the relation between your income and debt to assess your situation and decide how much you are able to pay per month. For example, the bank will consider around DTI of 30-35% (up to 40%) and for non-residents, the accepted DTI will be 25-35%.

If you are a British buyer, a currency specialist such as Universal Partners FX can help you navigate the current market while taking into consideration your specific needs, goals and your budget.

When considering buying your dream home in Spain, Universal Partners FX can give you peace of mind when sending money overseas. If you want to schedule ahead and safeguard your funds, talk to one of their foreign exchange experts today.

The pound appears to have risen ahead of the weekend, as Brexit negotiations continue. EU ambassadors have been told that a trade and security agreement with Britain is almost ready to be finalised as gaps on the contentious issues are “slowly shrinking.”

Both sides however remain inflexible, with European politicians saying that there remains work to be done and the UK saying that the EU needs to compromise. The risk of a no-deal Brexit in six weeks is still high.

According to a Bloomberg article, the UK “hasn’t moved sufficiently to overcome the main obstacles to a post-Brexit trade deal as three of the bloc’s leaders called for contingency plans to be stepped up in case there is no agreement.” Secretary General of the Commission Ilze Juhansone told envoys from the EU’s 27 member states on Friday that “negotiations could now slip into December as progress has been slow.”

On the other hand, the report noted that "The U.K. government has said that both sides have already made concessions on the three remaining areas of disagreement - access to British fishing waters, the level playing field for business, and how any deal is enforced - but that it’s up to the EU to make the final compromises."

A report on Reuters, stated that EU diplomats reported that “The European Union and Britain remain at odds in last-ditch trade talks over fishing rights, guarantees of fair competition and ways to solve future disputes, even though they are very close to agreement on other issues.” A senior EU diplomat told Reuters that “We are both close and far away. It seems that we are very close to agreement on most issues but differences on the three contentious issues persist.” Officials will continue negotiations online, as on Thursday it was announced that direct talks were suspended after a member of the EU team tested positive for COVID-19.

Negotiations are stuck

Negotiations have not progressed much as both sides remain unyielding on the main points: “Some things on the level playing field have moved, albeit very, very slowly. Fisheries are not really moving anywhere right now.” In terms of state aid, Britain has offered to set up a regulator for corporate subsidies, as the EU requested, but this was rejected as the body needed to be independent from the government and with a clear authority. Another EU official said that “negotiators mostly focused on such elements of corporate fair play as well as divvying up fishing quotas in recent days: ‘Both of these are still very stuck.’”

Pound Rises despite Brexit deadlock

The pound has risen against the Euro, Dollar and other major currencies, as negotiations continue. Markets remain confident that both sides will strike a deal despite the persistence of major differences. In the possibility of a trade agreement being reached the next two to three weeks, the EUR is expected to fall, something that will also be supported by positive news about a vaccine for Covid-19.

Are you Transferring Funds Abroad?

With the ongoing Brexit negotiations and unexpected volatility, contacting a currency specialist could save you time and money. If you are sending your family members money, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your personal transfer needs.

While investors have been preparing for a Brexit deal as early as next week, official briefings on Thursday and Friday are expected to cause volatility. On Thursday, the pound fell as global markets turned cautious after a “media report that EU leaders will demand the European Commission publish its plans for what will happen if there is no deal,” Reuters reported.

On Thursday, EU leaders will address outstanding issues like fisheries and “level playing field” provisions as they meet via a video call. Executive Vice President of the European Commission Valdis Dombrovskis said: "We're in the final push. There are still important elements to be resolved, substantial work to do. We've seen many deadlines come and go but there's one we'll not be able to move - Jan 1. We're now in the last moments."

Bloomberg News reported that a new trade agreement between the UK and Canada, could come as early as Thursday: “Reports that the UK and Canada are very close to reaching a post-Brexit trade deal are undoubtedly good news for both economies, but with time dangerously running out on a EU-UK trade deal, sterling is struggling to react positively to the news.”

Thursday and Friday to create pound volatility

The Sun newspaper’s Nick Gutteridge said that France will be determined to retain its access to UK waters post-Brexit and if it does not move on fisheries this could create more anxiety for markets. The UK is said to expect a final push from various leaders in the summit as they put more pressure on the UK for more concessions. Thursday’s summit might have a negative impact on the pound as markets reconsider the possibility of a deal.

On Friday, EU Chief Brexit negotiator Michel Barnier will brief European representatives of the EU's 27 member states, and markets will be closely watched for any signs of a deal. UK Chief Negotiator David Frost had told Prime Minister Boris Johnson on Tuesday that a deal was possible as early as next week.

How the pound will react?

“Observers still expect a deal early next week or in the first week of December. Market participants are similarly not that concerned over the risk of No Deal Brexit at this point in time,” wrote MUFG strategist Lee Hardman. “There is likely to be a much larger pound move to the downside if both sides fail to reach a deal (-5% to -10%), while we expect a modest move to the upside for the pound if a deal is finalized (+1% to +4%),” he said.

Analysts at UBS noted that there will be a "meaningful bounce" in the Pound if a deal is signed: "The latest news flow points to an agreement being struck just in time for ratification by the EU Parliament. Given markets - and hedge funds specifically - are relatively under-positioned for such an outcome, we’d expect a meaningful bounce for GBP on even a confirmed ‘skinny deal’ outcome." But a positive outcome also means good news for the pound and the UK economy which they tend to benefit if the global economy is doing well. The UBS analyst stated: "This is intuitive given the degree of openness of the UK economy and bodes well for a recovery in global growth into 2021. Naturally, the link has weakened since the 2016 referendum, but cheap valuations offer some hope of at least a partial snap-back in compensation. And the UK economy stands to benefit more than most in 2021 as it was hit particularly hard by this year’s pandemic.”

Are you Transferring Funds Abroad?

With the ongoing Brexit negotiations and unexpected volatility, contacting a currency specialist could save you time and money. If you are sending your family members money, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your personal transfer needs.

 

 

Sterling extended earlier gains after a report that the UK and the European Union could agree on a trade and security deal some time next week. Optimism regarding striking an agreement has given the pound fresh impetus, despite that time is running out.

Economists believe that Sterling could strengthen more by mid-2021 if a free trade agreement is reached, as officials are expecting news of some form of progress as early as Monday. British and European parliaments will still need to confirm the terms of the agreement before the transition period ends on 31 December. At the moment, investors remain hopeful, but the possibility of the talks stalling as major differences cannot be bridged is strong, and in such a scenario the pound would likely fall.

Newspaper reports suggest a trade deal is possible

During the week, various newspaper reports have suggested that a trade deal is "just days away" with the Telegraph saying that Ireland believes there are "landing zones" for an agreement and that France has accepted the restrictions to its fishing rights in UK waters after the transition period ends. The newspaper also reported that "the trade agreement could be announced as early as Monday, sources in Brussels suggested – but only if both sides made compromises on issues such as fishing and subsidy law." On Tuesday, the Sun newspaper said a deal could be expected next Tuesday, as the UK Chief Negotiator David Frost said to the Prime Minister Boris Johnson to prepare for a trade deal on Tuesday, news that have helped lift the pound.

Despite positive but unofficial reports in British newspapers, both the EU and UK have not offered a definite answer about the status of the negotiations which means the possibility of a no deal is still a valid outcome with some analysts remaining very cautious. At the same time, the markets seem to have made peace with a possible no-deal scenario, so any news of a deal, no matter what that deal is, will lift the pound. However, a possible deal will only mean temporary and limited gains for the pound according to some analysts, while for others, a considerable rise should be expected.

Brexiteers feel stuck as no deal impossible

The UK is now trapped and will be unable to benefit from Brexit, said former Brexit Party MEP Ben Habib. Habib, who attacked the PM saying that a no deal Brexit was not possible, said in an interview to Express.co.uk, that "We are already stuck, to some extent, in the gravitational pull of the European Union.” For hard Brexiteer Habib, a no deal Brexit would allow the UK to completely cut its ties to the European Union, but, unfortunately, this is not possible anymore. As he said, "We have a deal of some description from which we simply cannot escape."

Are you a Business Transferring Funds Abroad?

With the ongoing Brexit negotiations and unexpected volatility, contacting a currency specialist could save you time and money. If you are sending your family members money or you are paying your employees overseas, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your personal and business transfer needs.

 

Buying your home in Spain is a dream come true, but there are many important things to consider when it comes to buying and transferring funds from the UK to Spain. Since buying a property involves taking into account the actual price of the home as well as any related costs such as paying taxes and fees, which can be as high as 8 and 15%, it is vital that you consider your finances, minimise your expenses and have a solid plan with a forex broker.

Costs to consider

It is important to work out your budget for buying your property, taking into account all of the related costs. One of the first things to consider is the property transfer tax which is around 10% of the purchase price and every region in Spain sets its own one. For example, in Andalucía, a property that costs up to €400,000 will have a property transfer tax of 8%, whereas over that and up to €700,000, you will have to pay 9% or 10% if the property costs over €700,001. But this is not all. When you buy a home or a plot of land, you have to register with the land registry, so you get your deeds. The fee for this can be €500.00 for a property of €100,000.

When you are signing your contracts and buying property this is conducted in the presence of a notary who will also charge a fee to verify the documents and the act taking place. Again, the notary fees depend on the price of a house, so for a €100,000 property, you will need to pay €800.00 for fees.

When you are buying, you will also need a solicitor to represent you and whose fees will be around 1% of the purchase price. Also, you will have to pay the commission of the estate agent, if there is one, and it is usually included in the property price.

How to Save Money

As always, getting some extra help from experts could relieve some stress and save you money. A very useful thing to do is contact an estate agent who knows the area you want to buy in well and who can give you more insight, help you understand market prices and explain the process of negotiating a price further. They might save you a lot of money by explaining the right price for a specific purchase and help you have the upper hand in the negotiations by providing valuable background on the purchase.

Additionally, someone who speaks the language and who can explain the process, such as a lawyer who can act on your behalf and elucidate complex legal issues, is a great asset. They will be able to point out things to watch and avoid such as illegal property building or planning which might cost you money to resolve later.

Paying with cash is always a great advantage as you can pay less and is something to consider if you are willing to do so.

A useful point to consider is paying for a survey of the property to make sure there aren’t any underlying problems and ensure that the structure of the house is solid, otherwise, if there are issues you can negotiate a lower price or save yourself the trouble and money.

Use a currency specialist

Transferring sterling to euro can cost you bank fees. To avoid unnecessary expenses, it is wise to use a currency transfer specialist such as UPFX that they can transfer funds for your purchase. Not only will they offer you competitive exchange rates, but they will make sure that your funds are protected from currency fluctuation.

When you are buying, it is good to consider buying offseason, negotiate the price and get a special deal and be open to change your requirements and find something that is much cheaper. You might be surprised at the opportunities you might find when taking a step back and looking at locations or properties you may have not considered before.

If you are a British buyer, and want to secure a strong investment opportunity, now is the time to get in touch with your currency broker. A currency specialist such as Universal Partners FX can help you navigate the current market while taking into consideration your specific needs, goals and your budget.

When considering buying your dream home in Spain, Universal Partners FX can give you peace of mind when sending money overseas. If you want to schedule ahead and safeguard your funds, talk to one of their foreign exchange experts today.

 

Buying your home in France might mean taking up a euro mortgage if you do not have the savings to finance your dream. If you do require a loan, you should start early so you know you have the finance and can plan with confidence your expenses whether that is for the kind of property you can afford or other related costs. Starting early, means you can research and find a mortgage with a more favourable borrowing rate, rather than planning it late and compromising with something less ideal. Especially, when it comes to purchasing a property abroad, having your finances in place means that you will be a more appealing candidate to those searching to sell their house rather than if you were still looking for a mortgage.

Mortgages

Buying in France is considered a good investment due to the country’s healthy economy. If you are borrowing from a French institution, bear in mind that you will be allowed to borrow one-third of your total gross monthly income. If you do not have a stable monthly income, it will be very difficult to secure a loan, as salaried employees and especially those working for the same employer the last three years are preferred.

For a French mortgage, you can get variable or fixed rates from 1.50%-2.50% and deposit 15% to 25% of the property’s purchase price. The maximum for a repayment loan is 85% with 25 years maximum term, or 75% maximum for an interest-only mortgage and 15 years maximum term. Interest only requires the client to have a lot of assets and is more difficult to obtain. The minimum for a loan is usually around €150,000.

Fixed- or variable-rate?

While a fixed-rate mortgage might offer the security of standard and consistent payments, it is usually more expensive than a variable one whose rate fluctuates depending on the movement of interest rates. This means it can be to your benefit or go against you, making for example a monthly payment of €400 increase to as high as €600, even though this is rarer. In France, most mortgages are fixed-rate ones.

Life Insurance

Apart from getting a building insurance, which your bank might also arrange, you will also need life insurance, again also a product that can be offered by your bank. This depends of course on the lender and the value of the mortgage. Life insurance will guarantee that you can repay the loan and in some cases you might be asked to provide further documents such as a general medical examination certificate or blood analyses. If you are travelling regularly, your bank might also request to sign a document where you explain where you have travelled the last 24 months, or where you will be travelling the following 24 months, so they know your life is not threatened.

While you have the option to borrow from a UK-based bank, this won’t be easy and going to a French bank is the usual option with different banks having their own criteria.

Getting in touch with a French lender that specialises in offering mortgages to British expats might save you a lot of time and aggravation, as they will tell you exactly the requirements and help you get the best possible deal.

Use a currency specialist

Similarly, getting in touch with a specialist currency broker will also save you lots of money in the long term. Transferring sterling to euro can cost you bank fees, whereas a currency transfer specialist such as UPFX will do so without extra costs while offering you competitive exchange rates.

If you are a British buyer, and want to save money while buying your dream home in  France, now is the time to get in touch with your currency broker. A currency specialist such as Universal Partners FX can help you navigate the current market while taking into consideration your specific needs, goals and your budget.