The Mortgage

Recent market changes have made it easier than ever to buy a property in Tenerife.  Whereas previously an aspiring buyer could just about scrape together sixty percent of the cost of a property from a mortgage lender, nowadays lenders are putting together financial packages that mean almost anyone can benefit from property investment. 

What this means for you, the borrower, is that mortgage lenders are now prepared to lend more, over a longer time.  Flexibility has improved in many ways.  Lenders will now take a broader view of a client’s assets, for instance allowing an existing owner to purchase a second property even before the first is sold, and making this affordable by offering an interest free solution.  Another example is that it is now possible to borrow the stage payments of an off plan development, opening this lucrative form of investment to everyone.

Perhaps the most useful tool available to a prospective buyer is the ability to ‘pre-qualify’ for a mortgage, before the property hunt begins.  This means that the borrower is absolutely clear about how much he can afford, and shortens the process once he does actually find a property.

However, with choice comes the necessity for well informed financial advice. Information levels in the mortgage market remain unregulated and UK citizens are not covered under the FSA regulations in existence in the UK.  In the absence of enforced regulation it is paramount to make properly informed decisions and to seek out professional advice.

This need to analyse the multitude of products available in this dynamic mortgage market and identify the most beneficial product for a client’s individual circumstances is placing a strain on many of the smaller estate agents.  Without the infrastructure and trained staff, it is becoming impossible for them to keep up with the changes and offer their clients ‘best advice’. 

Clearly the ‘best advice’ that a prospective buyer can be given now is to talk to a substantial and established estate agent.  The process should now start with a mortgage pre-qualification process, which can even be done while you are still in the UK, before you set foot on the island.  Getting it right, first time, is of paramount importance because unlike the UK, changing lenders is a costly exercise.