Investment in second home

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El mercado inmobiliario español continúa su etapa de recuperación tras la crisis económica y se confirma como un sector atractivo para la inversión. Ya be mediante la compra de vivienda frecuente o como resultado de la acquisition of a second home. The latter more suitable for investment operations. Whatever the case, and thanks to the reactivation of the real estate market, these operations can become an alternative source so that you can make profitable your savings in the medium or long term.

La falta de rentabilidad en los mercados bursátiles internacionales en los últimos meses está causando que muchas persons como tú looking for other options to get benefits from your estate. At the same time, fixed income derivative products (time deposits, bank notes, bonds, etc.) are not having a good time, as a result of the cheaper price of money by the monetary authorities of the European Union.

These products rarely exceed profitability levels with savings of 0.50%. The prospects, thus, for your money are not the best you can find. You will have no choice but to go to other markets where you can make these movements more effectively. And among all of them, the real estate market is making a strong comeback. Or what is the same, the purchase of a property as a formula for make operations profitable henceforth.

Investment in brick returns

It consists of a sector closely linked to the Spanish economy and which was greatly affected by the economic crisis. But now it takes over its role as a safe haven before the few guarantees that most banking or financial products currently offer you. According to several studies in the sector, the potential for revaluation in the purchase of flats is once again attractive to investors. And specifically, the acquisition of a second home is one of the most effective ways to make the operation profitable.

Para esto tienes una oferta cada vez más potente de préstamos hipotecarios. Aprovechando la caída de márgenes en el índice de referencia de hipotecas, el Euribor. No en vano, se encuentra en tipos negativos y por tanto puedes aprovechar esta situación para comprar una segunda vivienda cuyo principal target es una operación de inversión. En este momento, existen algunos créditos de estas características with a differential below 1%. In other words, you will have to pay less for your monthly payments from now on.

What do these operations consist of?

Buying a second each would have a dual purpose. On the one hand, take advantage of the current economic situation to expand your assets. But on the other, get a refund using this property. Either selling it when it has appreciated or renting it. Even only during holiday periods. It will be an additional amount that will come in handy to adjust the budget. It will only require that you have more powerful savings than in other investments.

This is the time when this investment can be materialized through a very dynamic offer that is clearly expanding as a result of the good economic data presented by the sector During the last months. It should not be surprising that these acquisitions have materialized in the form of investment in most cases. In the heat of the important increases in their prices and that will lead to many people having achieved excellent capital gains on their movements.

Housing operations grow

The reactivation of the real estate sector in Spain is causing the number of contracts to obtain a second home to improve in recent months. The Housing Price Index (HPI) for the second quarter of 2016, released by the National Institute of Statistics (INE), confirms an increase in operations of 3.9%. This data shows the greater dynamism that this type of economic activity is registering.

It is an alternative to possess the savings after the weak performance caused by bank products (deposits, promissory notes, etc.). They rarely exceed the 0.55% barrier, como resultado de un dinero más barato. Inclusive rivaliza con la poca confianza que el mercado de valores despierta entre los inversores durante los primeros nueve meses del año. Donde el Ibex 35 no se está comportando como esperaban los pequeños y medianos inversores. Por otra parte, y aprovechando las mejores tarifas que ofrecen los mercados, está influyendo a algunos inversores a decantarse por la compra de una casa en la playa o en la montaña. Ya sea para su disfrute personal o como strategy de inversión alternativa.

Less quantities, but cheaper

Mortgage loans for the acquisition of a second home are being formalized under different contracting conditions with respect to frequent housing. It does not suppose, as one might initially think, more advantages compared to the traditional financing model. But on the contrary, they are more rigorous products in terms of the amounts they grant and their repayment terms. In any case, they can be hired under less interest than a few years ago as a result of the fall in the benchmark index to which most of the variable rate mortgages are linked.

Because in effect, the Euribor has gone to negative territory, historically in recent months, by contracting to 0.059%. Since 5.384%, when it was listed in the middle of the economic crisis, in 2008. Therefore, this class of mortgages to formalize real estate transactions are cheaper to subscribe than before, as long as they are carried out at a variable interest rate. In this regard, the latest data provided by the National Institute of Statistics, corresponding to the month of June 2016, show that the 76.6% of the mortgages constituted use a variable interest rate, compared to the fixed rate of 23.4%. Euribor continues to be the most used reference rate in variable interest contracts, with 93.6% for new companies.

Characteristics of these mortgages

Those destined for second homes maintain very well defined commercial lines. They offer a lesser amount compared to buying a stable home. Banks do not award more than 75% of its appraised value. Another contribution that this financing model generates is that its repayment terms are also longer. They rarely exceed the 25-year mark.. It is explained because the profile of its applicants is higher, in many cases people who have already reached 45 years of age. As a result of this peculiarity in the contracts, there is no choice but to shorten the repayment term.

Under these commercial constants, financial organizations have promoted an offer that is destined to satisfy these needs. In some cases, through ambivalent loans, in other words, for both the first and second homes. Even though this last option is marketed with a different contracting conditions. And in others, with proposals developed specifically for these acquisitions in the real estate market. Whatever the case, they are taking advantage of the excellent interest rates that their promotions originate. In the most aggressive proposals, they can provide a differential lower than 1%.

What credits can be contracted?

Ibercaja has designed the Progresa Mixed Mortgage 5 which is intended for the purchase of second homes. Offering a maximum amount greater than 70% of the property appraisal. The interest rate is determined by an initial fixed rate for a period of up to 5 years and by the remaining 2,50%. Even when it meets a series of requirements, it can be lowered to 1%. Consider a term for its amortization of up to 30 years.

The Variable Mortgage is Banco Santander's solution to the real estate needs of families. It is referenced to Euribor + 0.99% from the third year and 1.75% the first two. In its second home mode, it finances the 70% of the purchase, with a term for its return of no more than 25 years. Under a different approach, BBVA markets the Fixed Mortgage. It is characterized because its interests vary depending on the agreed terms to return the amount. Between 2,51% (for a maximum of 15 years) and 2,85% (20 years). In all cases it finances the 70% of the new property. Your acceptance needs some regular income of more than 1,500 euros per month.

The ING Direct Orange Mortgage is another option that users have to carry out this real estate procedure. For an amount of 75% of the appraisal value, as long as the operation is formalized from 50,000 euros. From Euribor + 0.99%, with a minimum term of 9 and a maximum term of 40 years. Another of its contributions is that it is free of commissions and other expenses in its administration.

Direct Office offers Euribor + 1,10% and is commission-free. Up to 60% of the purchase price, for a maximum amount of 600,000 euros and 30 years in advance to close the transaction. Its great contribution lies in the fact that its holders can benefit from the improvement in the interest rate, with a bonus of up to 1%. Through direct debit of your payroll, home insurance and hiring your cards. The Openbank Mortgage is presented to its clients at Euribor + 1,25%, as long as its conditions are subscribed. To the above, add the direct debit of national invoices. Finance the 70% for a maximum term of 25 years. Focuses on amounts starting from 50,000 euros, y no incorpora comisión alguna. Otro de sus aportes es que posibilita su amortización anticipada, sin penalty alguna.