# 110%financing by bank good or bad idea?



## airluchador (Mar 3, 2013)

Me and my wife were looking into buying repossessed bank owned apartment in Murcia. We are Canadians ,but we also posses EU passports. Rules here in Canada are quite different than in Spain and i get a bit shocked on how little they require to sign a mortgage? Here in Canada is a paper battle double credit check, bank references etc, but in Spain seems like things work opposite way,lol
In Canada if you get a 110% repossessed property you don't own it as there are mortgage laws that are pretty strict, so bank is in possession until you pay 50% mortgage off then it goes into your name, you can't rent the property to strangers etc, but in Spain it seems there are no mortgage fixed laws. Did anyone had experience with getting 110% financing in Spain and how does that work? Thanks for any hints!


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## 213979 (Apr 11, 2013)

airluchador said:


> Me and my wife were looking into buying repossessed bank owned apartment in Murcia. We are Canadians ,but we also posses EU passports. Rules here in Canada are quite different than in Spain and i get a bit shocked on how little they require to sign a mortgage? Here in Canada is a paper battle double credit check, bank references etc, but in Spain seems like things work opposite way,lol
> In Canada if you get a 110% repossessed property you don't own it as there are mortgage laws that are pretty strict, so bank is in possession until you pay 50% mortgage off then it goes into your name, you can't rent the property to strangers etc, but in Spain it seems there are no mortgage fixed laws. Did anyone had experience with getting 110% financing in Spain and how does that work? Thanks for any hints!



110% financing? I heard that was typical before the crisis, but now you are lucky if you get 80%.


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## Barriej (Jul 23, 2012)

elenetxu said:


> 110% financing? I heard that was typical before the crisis, but now you are lucky if you get 80%.


They are still available, although you have to jump through some flaming hoops first 
No negotiation, everything done by the bank, pay all the legal fees, take out insurance and I'm sure there is more.

I copied this from one of the many sites still advertising (I removed references to which company etc,

A SUPERB MORTGAGE DEAL:-
110% MORTGAGES – NO MONEY DOWN 
PLUS FIRST 2 YEARS ON 
‘INTEREST ONLY’ BASIS @ 3.25%
(FOLLOWED BY EURIBOR + 1.25%)
COSTA CALIDA, MURCIA
****JUST MINUTES AWAY FROM THE PARAMOUNT THEME PARK SITE****

BRAND NEW - KEY READY

FULLY FURNISHED
FROM ONLY 77,000 €
GROUND & TOP FLOOR PENTHOUSES ON FRONTLINE OF GOLF COURSE: 102,000 € WITH 110% MORTGAGES
GROUND & TOP FLOOR PENTHOUSES ON FRONTLINE OF GOLF COURSE: 70,000€ WITH 100% MORTGAGES


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## mrypg9 (Apr 26, 2008)

The granting of excessively large mortgages to people who found themselves for whatever reason unable to meet the repayments was one of the chief causes of the many repossessions in Spain and the UK.
I am amazed that the practice is still continuing. Proof that we humans never learn from our mistakes.


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## Chopera (Apr 22, 2013)

There seems something nonsensical about buying a property from a bank with a 110% mortgage. I mean say the property is purchased for €100k the mortgage will be €110k and the transaction tax will be based on some other figure anyway. So from the buyer's point of view it's the same as buying the property for €110k because that what they'll end up paying for it. Or have I missed something?


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## Chopera (Apr 22, 2013)

airluchador said:


> Me and my wife were looking into buying repossessed bank owned apartment in Murcia. We are Canadians ,but we also posses EU passports. Rules here in Canada are quite different than in Spain and i get a bit shocked on how little they require to sign a mortgage? Here in Canada is a paper battle double credit check, bank references etc, but in Spain seems like things work opposite way,lol
> In Canada if you get a 110% repossessed property you don't own it as there are mortgage laws that are pretty strict, so bank is in possession until you pay 50% mortgage off then it goes into your name, you can't rent the property to strangers etc, but in Spain it seems there are no mortgage fixed laws. Did anyone had experience with getting 110% financing in Spain and how does that work? Thanks for any hints!


In Spain the mortgage is "attached" to the property rather than the person so the banks have traditionally (and wrongly) not been so fussy about the ability of the person to pay the mortgage, as long as the value of the mortgage is covered by the value of the property the banks have been easy going. So in Spain when you move house the seller can't transfer the mortgage to another property, instead they have to cancel the existing mortgage or sometimes the buyer can take on the existing mortgage. The Bank of Spain did introduce laws limiting mortgages to 80% loan to value, but during the boom the banks got round this by over valuing properties, which might be what's going on here. One thing you have to get your head round in Spain is that a property's "value" is a figure dreamt up by a valuer (tasador) and can bear little relation to the actual market value.


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## Pazcat (Mar 24, 2010)

This is one of those things I have wondered about, we have come up against the 100% loan a couple of times yet after enquiring further about them were met with silence. Thankfully lots of bank properties are rubbish so we never saw the need to take it further.
Surely though these 100% loans are still means tested in some way. I couldn't imagine them giving you one if they wouldn't give you a 80% loan to start with.


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## Lynn R (Feb 21, 2014)

I have difficulty understanding why anybody would want to take out a 110% mortgage unless it was in a rapidly rising market, otherwise they are in negative equity from day one. Bad enough when that happens due to circumstances beyond your control, why would anybody want to put themselves in that position on purpose?

Close to the site of the Paramount Theme Park? Have they actually started building it yet, or is it still just a pipe dream?


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## ddrysdale99 (Apr 3, 2014)

Use the extra 10% for furnishings?


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## Chopera (Apr 22, 2013)

ddrysdale99 said:


> Use the extra 10% for furnishings?


or the transaction costs


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## Pazcat (Mar 24, 2010)

or make it legal.


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