BANKING IN SPAIN IN 2010

It is not uncommon to hear surprising stories about banks in Spain. They are in fierce competition and in some ways struggling to come to terms with the demands of their clients. However, that is good news for the customers.

The British on the Coast have seen it all before when from the 90’s onwards when the banks were offering anything and everything to anyone.

It must be remembered that Spain whilst steeped in history, has only really developed since the Civil Code was written and Franco deposed some 30 years ago. It has, however moved on leaps and bounds.

It is not that long ago that mortgages were virtually unheard of and unless you had cash you couldn’t really buy a property. The banks didn’t give loans and there was no such thing as an overdraft facility. This is not now the case.

Banks in Spain make money on the charges levied to the client and everyone should be aware of those unknown deductions made from your account. You should always check what they are for and that they are legitimate. The odd 10€ here and there may not matter but it does add up. The more worrying fact is that they usually come out without any warning.

For anyone opening a bank account you should check clearly what the costs involved are, what the on going costs are, what you will be charged for debit and credit card transactions and whether interest will be applied to the account.

It could be beneficial to check whether there are any high interest accounts that leave you access your money when ever you wish. There are some great deals around at the moment.

As with anything in Spain do not rely on what you are told ensure that you check the Spanish documents you will be asked to sign. You can get caught here just as you can with anything else in Spain. Don’t forget that in Spain if you sign a document you are deemed to understand it, whether or not you did !

Mortgages are somewhat difficult to come by at the moment but if you are looking for finance then shop around. There are banks who will lend at a reasonable rate and the time spent investigating this will be time well spent.

If you have property or a mortgage in Spain then you will probably know that the amount lent was based on the valuation of the property and not the purchase price. This method of lending has left many in difficulty.

However, the problem is now that the valuation companies are down valuing properties to such an extent that the banks won’t lend on a true purchase price.

There is still the difference between resident and non resident mortgages but a number of banks accept the fact that if you pay social security you are a resident.

Many banks are now offering equity release or re-mortgage. This is an excellent idea for those that have all their investment tied up in property. However, the criteria for qualifying for an Equity Release scheme is hard. Moreover there are some schemes around that really are not what they appear to be. So if you are thinking about Equity Release then stick with a high street bank. You should watch carefully for the small print and check exactly what is entailed.

So if you are looking at your current account, a mortgage or equity release shop around and find what suits you. And remember everything in Spain is negotiable including bank fees and charges !