Mortgages in Spain

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NON-RESIDENT SPANISH MORTGAGES

Purchasing a property abroad is a major financial step and it is very important to make an informed decision in order to achieve the best possible terms, and to be fully aware of arrangement fees and other associated costs.

Non-residents purchasing in Spain can generally obtain up to 70% of the value of the property by way of a mortgage. Recent changes in the law dictate that the mortgage amount can not be greater than the declared price of the property, so it is imperative to find out what this amount is as it can affect the percentage you are able to achieve. In the past it has been common practice for the vendor to under-declare the value, but the recent changes mean this is no longer feasible if the buyer requires the highest possible amount of finance via a mortgage.

The first step is to find a suitable property within budget, and confirm the amount to be declared. Once this has been done you will need to obtain the 'nota simple' of the property. This document states the address, m2, owner name and additional information regarding any liens and encumbrances.

The documentation required by the bank for non-residents in order to obtain a mortgage is as follows:

Copy of Passport
NIE certificate (You can obtain this at the police station in Spain, or via the Spanish Embassy)
Last 3 months bank statements
Experian(UK) or Credit Report
Last 3 months pay-slips
P60 (UK) or last tax declaration made in your home country for non UK citizens
Nota Simple of the property to purchase
Letter from Accountant (Self employed)
Copy of last tax returns and annual company accounts for the last two fiscal years (Self employed)

Once you have been approved, in principal, and a pre-valuation of the property has been done (the bank will take care of this), you will need to pay the bank a provision of funds to cover the cost of the official valuation on the property. Providing the valuation reaches the amount necessary you will then proceed to the 'official offer' from the bank. This is where you negotiate terms and conditions in order to improve the offer.

Once you agree to terms and accept the conditions the bank will start to arrange the details for the signing at the Notary (you should allow approximately 4-8 weeks to complete a mortgage from start to finish).

If you are not going to be present in Spain at the time of the signing you must organise Power of Attorney, either through the Spanish Consulate in your country or directly with you lawyer in Spain.

The costs involved in securing a mortgage vary from bank to bank and broker to broker. If you budget for an additional 14% costs on top of the sale price, this should cover all legal, Notary and registry fees along with VAT, broker commissions* and opening charges. Initial interest rates are currently around 4.3% (January 2007), and revision based on the Euribor anywhere from +0.5% to +1%. Opening fees are at the banks discretion and do vary anywhere up to 2.5%.

We can generally offer up to 70% of the valuation, over a maximum of 40 years with 10 years interest only. Maximum age at end of the mortgage term 75 years. In some instances we can increase this to 80% up to 80 years, this is offered on a case by case basis.

* Our commission is charged on successful completion of the mortgage at the Notary on the day of signing. No mortgage, no fee.

RESIDENT SPANISH MORTGAGES

For residents in Spain we offer a wide spectrum of possibilities to obtain the financing for a property, as terms are far more flexible than for non-residents.

The process is similar to the non-residents and the documentation required is as follows:

NIE Certificate
Copy of Residencia (if applicable)
Copy of last IBI bill (if applicable)
Nota Simple of the property to purchase
Details of any current mortgages (Redemption figure and last 3 months receipts)
Details of any other loans/credit cards etc...
Last 3 months payslips (nóminas)
Copy of work contract (Employed)
Work History (Vida Laboral, order online at www.seg-social.com)
Last 3 months bank statements (Employed)
Last tax declaration (Declaración de la Renta)
Social Security receipts last 3 months (Self Employed)
Personal Accounts (Self Employed)
Company Invoices and Receipts for the last 12 months (Self Employed)
Last 12 months bank statements, personal and business (Self Employed)
Annual company accounts for the last 2 fiscal years (Self Employed)
Escrituras of Company (Self employed)
 

Again, the costs involved do vary, allowing 14% of the sale price of the property should ensure all costs, including commission, legal fees, Notary, VAT etc.. are covered.

We can offer up to 100% finance for residents, subject to status, and on a case by case basis. A maximum 40 year term and up to 75 years of age.

If you have a mortgage already, we can arrange bridging loans at competitive rates, and double guarantees if you do not wish the sell your current property, but wish to increase your portfolio. This can be done over two or more properties.

For a full, no obligation quote and to discuss the possibilities available, please contact us with your name, telephone number and the most convenient time for us to call you.