all that's very true with out a doubt, their is investing and their is just plain madness but the robster did say he had a good job a could pay it back so he must be the best judge and if he can pay back then he should go for it.

hi ,bankinter do intrest only mortgages see fayna in the bank at los cristianos ,or halifax banco espana also do them no probs with the latter .

The problem with property in Tenerife is trying to get a true valuation you can see the same property in various agents at vastly different prices often caused by the seller saying what they want for the prop & leaving the agent to sell it for what he can get

Reselling property can also be very difficult when your main base is 2000+ miles away

Hi

we did it in 2003!

we had a property in the uk with a low mortgage and worth 4 times what we owed, we were considering upgrading this or buying a second home abroad (involving the same outlay). The agent who came to view our house in the UK was absolutely insistent when we told her our plans, BUY a second one abroad was her outright advice (bear in mind she lost our commission for this advice). After further consideration we agreed.

We found our place eventually.

We raised 60% on our property in the UK and the remainder in Spain - - although we had a couple of bob savings for fees and eposit etc we effectively raised a 100% mortgage - - since then our property in the UK has gone up by more than we borrowed and the Spanish property has gone up by 40% of it's original price / OF COURSE this is in the current market and only if you sell AND prices can come down oh and there are the risks with interest raises.

We were certain we could afford the costs even if we did not rent out and even if interest rises - - we have done fine up to now,

The only thing I would have done differently was to get more of the mortgage in Spain because of tax. Tax only applies if you do not intend to reinvest in another home, so as we are hoping to upgrade to a villa next we might be able to avoid this but will not doubt get stung in th end.

Good luck, and enjoy every minute of it - - we do
Diane

If I interpret what you say correctly your Spanish mortgage was only around 40%. What you raised on your property in the UK is immaterial in this context.

Also bear in mind that in order to be considered a resident as the seller of your property (thus avoiding the 5% tax retention) you must obtain certificates of fiscal domicile from your local tax office. Just having residence permits is no longer sufficient.

Also bear in mind that in order to qualify for the exemption from paying Capital Gains Tax you must have owned the property for three years and the signing for the current property must be carried out before you sign for the new one.

In the unlikely event that the price of the new property is lower than the price of the one being sold you have to pay CGT on the difference.

Are you saying that if you sell you'r place in Spain and reinvest to a bigger property that you dont pay capital gains.
Stephen.

Yes, BUT only if you are resident with certificates of fiscal domicile (ie proof that you pay tax as residents in Spain) and you must have owned the property you are selling for at least three years.

........there is another way of purchasing an additional property without having the long term risk and worry of another mortgage. I know that it won't be suitable for most people, but it has worked for me, and I wouldn't say I'm particulary clever (livvd an woz edukatid in 'aknee, eest lundin )
Thought about a "place in the sun", for a long time , like so many others do - but how on earth could we afford one ? Renting out was the only answer, but that was risky enough without another mortgage, however small.

The answer came in 2001, when I took early retirement, age 51. The lump sum paid off our existing mortgage, then we took advantage of the rising property market by selling up, making a fair profit. Then we downsized, and managed to hold on to most of what we made. And then, 11 months later we moved and downsized again - with similar results......

And so,in October 2004 we finally bought our "place in the sun " - for cash.

Yes, it's still risky - we need more rental income than would be achieved by leaving it in the bank and getting interest from it - but hopefully the long-term prospects will provide justification enough.....

Hi sunowner,I think without a doubt you made a great move,without a bit of risk we would get no where and with property as long as you do you'r home work thing's will turn out fine.
Stephen.

.......thanks, but it was just an illustration of another way of buying without a mortgage. Obviously it has just been luck that the boom in property prices came along just at the right time.
Not much risk in property....not at the moment....but who knows the long term trend enough to consider a mortgage on a holiday home without sleepless nights ?
....and no financial adviser would have recommended putting nearly all our capital into property.....

Hi Beachcomber/John

Thanks for the info regarding papers and resale, I wasn't aware of these facts.

Is an NEI/NIE number sufficient as I will be paying local taxes - or is it something entirley different? I will discuss with my solicitor of course but what will I be obliged to pay tax on if I don't earn there?

Thankfully, we have no intention of selling yet but will certainly get this fiscal domicile a.s.a.p

Cheers, see you in may at Beachcomber

Diane

Although 100% mortgage is not the best idea, sometimes it's the only way people without savings can invest in property.
If you are certain Robzter that you can afford it, Good Luck and Go For It!

The people who get into debt and can't afford it are the one's who couldn't afford the repayments in the first place and live beyond their means or unfortunatley who's circumstances change. As said before, if you can't afford it and think you might loose the property in the future, you can always sell it. Spanish properties keep on rising in price and the investment sounds like a good one.

Let us know how you get on.

Spanish properties keep on rising in price and the investment sounds like a good one.

But if it is not a true 100% mortgage then the property will have to go up in value by a hell of a lot just to match the inflated valuation.

True, but if it's an investment and you are making money on it, things should be better.

I agree with mibut, but it seems that people can only see the property in the sun and don't want to believe reality.
The property has to go up probably 5 or 6% (or whateven interest rates are) p.a. if people have a UK mortgage, just to cover interest payments.

Sorry, but I find it unbelievable that someone who has a good job and salary without any commitments cannot save enough for a deposit.
Why are people encouraging someone to take out a fraudulent mortgage.
Sad.

Sorry mibut but i think you have got it rong, i have no reason to think that robzter is telling lies (why) the guy know's more about his finances than us. I know that if i where to have lisend to freinds and family i would never have bought my place in Spain, i did and have no regrets.
Regards,Stephen.

my salary is very good and have no outgoings,(lucky me!! lol )

And can't manage a deposit.
Not exactly financially responsible.

One mans responsibility is another mans millstone!!