Equity release in Spain has become increasingly more difficult in recent years. In the hay day of the Spanish and International property boom, financial institutions where only too willing to lend against property. In today's environment it is difficult to future value properties, and the credit markets are not as liquid as they once where. As a result the options for clients who are asset rich, and cash poor, have reduced.
The pool of lenders that would provide equity release and lifetime mortgages in the UK and Overseas has reduced. Some that have left the market include Prudential, Coventry Building Society, and Newcastle Building Society. Other lenders have suspended there services until funding markets improve.
There has also been some issue with misselling of schemes, paticularly in Spain. Intermediaries where selling remortgage packages, along with investment vehicles for the released capital. These investment vehicles where designed to pay the mortgage interest, but many of them lost value. It is now important to research your advisor carefully, and ensure the products recommended are within your attitude to risk. We recommend a fully qualified and regulated advisor, with track history of suitable recommendations.
We work with a number of firms who provide both retail equity release (under 1 million euros), and high net worth capital release (over 1 million euro). Both provide excellent solutions, but go down different routes via retail and private banks. Lending criteria can be stricht, so it is important to have a thorough discussion with an advisor, to see if the refinancing is plausible
UK lenders have difficulty accepting Spanish property as any form of collateral. The issues concerning illegal builds; corrupt mayors; thousands of empty units and unfinished shells; falling property prices; demolition orders etc. have caused the UK lenders to reassess their lending criteria. Some Spanish and International banks can be used for these purposes, but it requires the skills of an experienced consultant to find a solution The first solution that our patners offer involves the use of a UK property as collatteral, and via this route is usually the most succesful. Key points include :
- Plans available for applicants starting at aged 55 years or over
- A range of both Lifetime Mortgages as well as Home Reversion Plans
- No monthly payments on any plan
- Single Cash Lump-Sum/Income Drawdown & Home Reversion options
- All plans provided by members of Safe Home Income Plans (SHIP)
- “No Negative Equity Guarantee” on all Lifetime Mortgages
- Legally binding agreement with “Guaranteed Occupancy” on all Home Reversion Plans
- All equity release plan providers are fully regulated by the UK’s Financial Services Authority
- A comprehensive panel of Solicitor’s that are experienced in dealing with Equity
- Release plans that are independent and regulated by the UK’s Law Society
Fortunately equity release in the UK is very highly regulated by the FSA and can only be dealt with via FSA Regulated and fully qualified advisers who hold the CeRER equity release qualification. G.A.D offer a complete service including fully regulated advice, guidance from start to completion, and money transfer facillities to move any released capital to your chosen location and currency. If this route is suitable for yourselves, complete an enquiry form, to speak to a consultant.
There are also many clients who have assets overseas, and not in the UK, for which they would like to release some equity. These situations are more complex, however there are solutions available if financial criteria can be met. Some key points of the service include :
- Structuring, preparation and presentation of credit proposal and support right up to approval.
- Direct negotiation to obtain the most favourable lending terms.
- Introduction to selected bank and preparation and presentation of the necessary forms and documentation the bank requires to fulfil its compliance requirements.
- Full legal support and troubleshooting issues from our international lawyers to prepare the necessary property and company documentation for presentation to the chosen lender.
- Central resource for queries and resolving issues that often arise in such transactions.
If you have an overseas asset, be it residential or commercial, complete an enquiry form and a consultant will get in contact to see if they can provide a solution to your needs. FinanceSpain.com act as introducers at no cost to the enquirer.
As mentioned above, if you are an expatriate who has an asset in the UK, we have teamed up with one of the leaders in lifetime mortgages and equity release. They are specialists in releasing capital from property either as lump sum, or a regular income, to be spent however you wish. Fully qualified and FSA regulated, they can give you a free decision-in-principle on the feasibility and amount of equity that could be released from your UK property.
To obtain a no obligation decision, simply complete the form below. Please note this is only for equity release on UK properties, for overseas properties, please use the enquiry options on the right.
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Advantages and disadvantages of Equity ReleaseAdvantages:
- Equity release will make cash available either as lump sum or regular income.
- Products are available where no payments are required until the home is sold
- Client remains in the home for the rest of his/her life
- You can usually still move home (subject to restrictions).
- Equity release reduces the value of the estate for beneficiaries
- Equity release products involve borrowing against or selling all or part of the home.
- There may be more suitable methods of raising the funds you need.
- Equity release schemes may work out more expensive in the long term than downsizing to a smaller property.
Our partners specialise in assisting clients with often
complex financial circumstances, to release equity on their residential
property in prime locations in Spain, Portugal, France, UK, Asia, North
America and Australasia. Working with highly reputable private banks,
funding sources, and large international law firms, clients are
assured of a discreet, tailored and efficient service. They can also
arrange property purchase and remortgage in the same areas, commercial and large scale project finance.
How It Works
If you have a property in the above lending locations worth more than €2m and with net equity in excess of around €1.5m then they amy be able to arrange for equity to be released. In the case of multiple properties, with some banks it is required that each unit has a minimum value of €2m
Depending on location between 50% and 100% of the value of the property can be released. In some cases the bank requires that a certain amount of the funds- normally 50%- are reinvested back with them and pledged as security. Some banks allow you to use unpledged funds for any investement or project. Others may insist they be used for a specific purpose, typically to invest in other properties or refurbishment.
Complete an enquiry form to discuss your requirements with a consultant
Releasing capital from assets can be a complex area, and requires specialist support. By speaking to a consultant they can assess your current situation, and provide a feasibility summary on the chances of success. Whether it's a commerical unit, residential home, or high value portfolio, there are solutions in the market.
A wide range of locations can be considered whether it's Spain, Monaco, Hong Kong, or a number of other international countries. For simple retail equity release in Spain, complete the grey enquiry box below.
For more complex enquiries complete the 'Submit your Question' form below, or email EquityRelease@FinanceSpain.com. We work with a number of experienced consultant firms who we feel can provide a high quality service and solution. However, we are not responsible for the work undertaken by third parties, and always recommend adequate due dilligience.