There are several ways to do this and I have listed below captions for each method. If this is something you are considering it is recommended that you consult with a qualified adviser to discuss your particular circumstances:
Normal Mortgage – Most of you will know what this is and how it works but to recap, you and your property are assessed by a lender on the security of their investment and they either lend or they don’t. Age, income, property are all big factors in this and of course you have to make payments every month reducing your monthly budget accordingly.
Investment Backed Mortgage – Similar to a normal mortgage but instead of taking out a smaller percentage of the money tied up in the property, more is released and an investment is secured which should pay the mortgage and may even provide an additional income source on top. There are various schemes out there some promising the world but personally I would look at the safest options and if there is any extra money left over, great.
Reversion Scheme – Personally I don’t like these. You basically sell your house to the lender and they accumulate all the future equity in the house, it is very limiting on what you as a tenant can and cannot do. Thankfully I am not aware of any reversion schemes currently available in Spain and they are suitable for only a very few.
Lifetime Mortgage – A good lifetime mortgage provider will offer a “No Negative Equity Guarantee” meaning you can never owe more than your property is worth. Rates should be competitive and get out clauses minimal. These schemes usually are only available to the over 60’s and provide a lump of money to do with as you wish. They are a lot easier to set up as it is the property that is under assessment and not income etc. The interest is added to the loan and you don’t have to make monthly payments. A good scheme ensures that the house remains yours and you are free to sell it at any time should you decide to.
In Spain there is no professional requirement for mortgage advisers to be qualified. Ensure that your adviser is qualified to discuss the options available as this is a big decision and you need the correct information and assistance.
