We feel that banks are slowly relaxing their lending criteria. We are starting to see one or two banks offering more attractive deals and higher LTV's(Loan-To-Value. However, banks are still being cautious when it comes to assessing a client's affordability. Most banks use a debt/income ratio of either 35% or 40%, although we work with one bank that uses 50%. This really helps those clients who struggle to get mortgages elsewhere due to having a higher ratio of regular outgoings on mortgages, loans, credit cards etc. to net disposable income (the "debt/income ratio").
The eurozone base rate has remained at 1% for some time now, meaning that borrowing in Spain is still cheap. With the recovery in Germany faltering and ongoing problems in the so-called PIIGS group of countries (Portugal, Italy, Ireland, Greece and Spain), it is very unlikely that there will be a sudden hike in rates.
With regards to the exchange rate, this is more or less the same as last month. Please remember we can offer the dual-currency mortgage, which allows your clients to pay the mortgage in pounds sterling and avoid any currency fluctuations.
This post was supplied by Mortgage Direct.
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