Rates are reasonable, credit is still available and the sun is shining
July 20, 2012
This week has seen plenty of news about Spanish banks with little tangible substance or change to the status quo.
Germany has finally approved the 100bn bailout for Spanish banks but there still remain some differences of opinion as to exactly how the funds will be used. Who will require funds will be determined after the more detailed audit due to complete end of August being undertaken by an outside consultancy company. Almost certainly a Bad bank will be created for banks to place their stock in as has happened in Ireland.
Spain itself continues, despite the agreements for the banking system, to suffer in the bond market paying a high price for even 5 year bonds on Thursday.
Bankinter announced half year profits down on previous year but this included the setting aside of money to allow them to meet the 9% core capital ratio required by next year thus suggesting they are in a stronger position than some of their counterparts.
Bad debt ratios for Spanish banks climbed again at end of May, according to this weeks published figures and house prices and overall gross lending also fell.
Spains Banks, in general, say they expect to continue to offer new mortgages throughout this year and do not see the situation worsening. All banks however are giving preference to clients who buy bank owned stock rather than those buying private sales when it comes to the granting of loans.
Despite this 70% loans remain available for the right profile client and the market seems to have flattened out at a general 60% loan to value for private purchase and nonresident applicants. This may change if banks become concerned about further falls in house prices.
Average rates are 4.5% held at this level by the 12 month Euribor rate which is expected to hit a record low next month.
On the bright side, property choice is abundant at present and it is now the case that valuations above purchase prices are being seen on a more regular basis indicating some vendors desire to sell at very realistic prices. Rates are reasonable, credit is still available and the sun is shining.
International Mortgage Solutions