subject: Marbella Property In Costa Del Sol And 100% Mortgage Product [print this page] Marbella Property In Costa Del Sol And 100% Mortgage Product
So with Marbella property sales on the increase here in Costa del Sol mainly helped by the sales of secondary location products with 100% mortgages the question is do these really represent value. The real question you have to ask yourself is do you want a great deal or do you want a perfect property because let's face it if it was the perfect property at the perfect price the banks wouldn't have to lend 100% on them and most importantly due to new Bank of Spain regulations concerning bad property debt in 2011 the banks would prefer to lend a lot less. Spain attracts a lot of investors but Spain like no other property market gets confused in that most investors want to enjoy there asset which means using it for holidays and long weekend which means as an investor you automatically rule out long term lets the most secure way of getting your investment to cover its costs this leaves an investor looking for holiday rental income only. However if it was a residential investment in the UK the investor would be looking for long term tenants. So at the present time these secondary 100% mortgage products are appealing to these so called lifestyle investors for the obvious reason that it makes good business sense. These properties tend to be on prime golf courses in the Marbella area and therefore lend themselves to holiday lets out of season for Golfers maybe when the owner doesn't want to use the property. However it's the economics of the deal that make most sense for these buyers in that an apartment costing 240,000 can be bought for only 24,000 costa and the buyer gets a mortgage at 0.3% above Eurobor with the first two years being interest only. This means the monthly repayments are currently 420.00 per month and the buyer can immediately rent the property for 700.00 per month and probably more if he doesn't want a tenant from day one and is prepared to wait. However the flipside to this is that 100% products are only available on a very few selected developments where the discounts are over 30% from the original price and the bank can sell these and in real terms the bank is trying to turn bad debt into good debt. So if you don't need a 100% mortgage product then it makes sense to shop around and find that perfect property and obviously you have more room to negotiate with a prospective vendor. Where the bank is making a loss they are expecting to get cash or a large percentage of the sale in cash. So there certainly is some benefit to 100% products but they are limited but as the cheapest units sell first you can get the properties with the best views and selling points as the better and more expensive units tend to go last.
