My mam is looking to purchase a place in Spain

M

MoneyM

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My mam is looking to purchase a place in Spain (not really an investment property) but just somewhere so she can head off whenever she likes.

She owns her own home (no mortgage etc and the house is worth apx €360)

What would be the best way to do something like this?, she has gone to the banks (for equity release but they won’t touch her)

She doesn’t want to sell her house and the property she is looking at is apx €150.

Thanks in advance.
 
Re: Some help needed

So the bank won't give her money? Is she working? What age is she?
Is it possible that perhaps she cannot actually afford to buy a place in Spain?

mf
 
Re: Some help needed

It’s not that she wants “free money” from the bank she would like to obtain some capital from her house now and then when she passes on that they take that amount (with interest of course) away, she doesn’t work, she’s 68 years of age.

She been talking about this for a while now, and I am just look for some advice and I thought maybe somebody in here could either point me in the right direction or just give some “friendly” advise.

Tks
 
Re: Some help needed

Have a look at this

Not advocating that you should do this but I suppose its an option..
 
Re: Some help needed

At her age, I'd say you'll find it very hard to find a bank willing to let her take on this level of debt. (Although maybe someone else out there who's more familiar with the various banks and different offerings available might be able to correct me on this)

Is it possible that you (or one of your siblings) could buy her out now and let her continue to live in the house? If she's not willing to sell the house then I don't think you've got much other options.
 
Re: Some help needed

Thanks, she was thinking about going down this route i.e the “mortgage for life option” but I am a bit worried about this and am trying to read up on the best ones available to her, the interest on theses are mad, but I suppose she is getting something out of it.

Tks again.
 
Does it have to be Spain and for that much? Spain is one of the most expensive holiday home locations.

Also, could she buy along with one or two friends and divide the cost between them? If she's only going to use it part of the time, it might be an idea.
 
Assuming that your Mother is now on her own I think she should look very closely at the rental option rather than going down the purchase route. There are a number of excellent properties in Spain available for letting at very low cost. Also if your mother is planning to go outside of the main tourist season she is in a position to avail of the lowest rental deals.

Look up the net for Spanish rentals you will find that it is far more cost effective than forking out €150K anf financing this with a full mortgage.
 
No it doesn’t have to be Spain, but she would be quite familiar with Spain and it would be were she would feel most comfortable buying (as she would be on her own sometimes if family can’t go with her), she doesn’t have many friends and the ones she does are still married so wouldn’t be interested in buying with her.

The reason she wants to go down the “owing route” is she feels that her house will just be left to the kids (if anything happens to her) and she rather enjoy some of it now.

I am just getting her info and letting her make her own mind up, on one of them I am looking at the interest PA is nearly €6k!!!! they’ll just be taking the house by the looks of it if anything happens to her …..seems a lot…..:(
 
I would tend to agree with BrenG

Consider the nice holidays that could be had with €150k. a €15k holiday for the next ten years, for example.
 
It really doesn't seem like she could afford to take out a €150K mortgage just now. Even at 4% per annum, the interest would be €6,000 as you say. For this, she could easily have several holidays every year without the stress of ownership of a property far from home.
 
budapest said:
It really doesn't seem like she could afford to take out a €150K mortgage just now. Even at 4% per annum, the interest would be €6,000 as you say. For this, she could easily have several holidays every year without the stress of ownership of a property far from home.
Click to expand...

I agree. The whole concept of borrowing to spend the equity in the family home is well addressed elsewhere in AAM. The best advice to give your mother is to keep her expenditure within what she can afford.

Now I agree that she should not starve herself of enjoyment purely to leave an unmortgaged property to her children but she could consider releasing a much smaller amount of equity (say app €20K ) which would be more than enough to enable her to visit Spain or elsewhere on a regular basis for the next 10-15 years
 
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