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How to get a mortgage in Spain

Posted by sunutirevebxiiu214131 on September 9, 2019
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How to get a mortgage in Spain ? What is the maximum amount I can borrow? 

Lending in Spain is based on the lower of the valuation or purchase price of the property. The maximum that non-residents (those who do not pay Spanish income tax) can borrow is 70% of the lower figure. If an applicant can show they have been paying Spanish income tax, the maximum is 80%. These are the maximum amounts – not every applicant will qualify for these (see ‘Could I be classified as a fiscal resident’ above). 

Due to our relationships with the banks, for foreign clients, our mortgage adviser can achieve rates as low as 1,7% fixed for a 20 year term, from Euribor + 1.35%, products without life cover. 

Please contact us for more information

IMPORTANT TO KNOW ABOUT MORTGAGE AND PROPERTY COSTS IN SPAIN 

The costs of purchasing property in Spain with a mortgage can vary considerably depending on the price of the property, the region in which the property is located, the advisers appointed (lawyers, brokers, agents, etc.) and the deal agreed with the vendor or estate agent. Having said that, estimating costs of 10-13% of the purchase price is currently a good guide. In our case study, the total costs are exactly 12.46% of the declared price. 

COSTS FOR €300,000 PROPERTY – €180,000 MORTGAGE 

All costs are estimates.  

PROPERTY COSTS 

PROPERTY TAX: €30,000 

NOTARY, REGISTRY, AND GESTORIA FEES FOR PROPERTY DEEDS: €1,200 

LAWYER FEES: €2,500 

SUB-TOTAL: €33,700 

MORTGAGE COSTS 

MORTGAGE TAX (AJD): €0 

NOTARY, REGISTRY, GESTORIA FEES FOR MORTGAGE DEEDS: €0 

BANK OPENING FEE: €1,800 

VALUATION FEE: €400 

MORTGAGE ADVISER FEE: €1,495 

SUB-TOTAL: €3,695 

TOTAL: €37,395 

Some banks have minimum opening fees and lawyers, brokers and valuation companies also have minimum fees. This means that for cheaper properties, the costs as a percentage of the property price can be significantly higher than 13%. For properties with a price less than € 40,000, a mortgage may not be the most cost-effective solution. 

Always check whether the selling agent has included their commission in the purchase price. Some agents do this and do not charge the purchaser directly. Others do not, so you need to check this out before assessing the overall costs involved. 

What is the maximum amount I can borrow? 

Lending in Spain is based on the lower of the valuation or purchase price of the property. The maximum that non-residents (those who do not pay Spanish income tax) can borrow is 70% of the lower figure. If an applicant can show they have been paying Spanish income tax, the maximum is 80%. These are the maximum amounts – not every applicant will qualify for these (see ‘Could I be classified as a fiscal resident’ above). 

DOCUMENTS REQUIRED FOR MORTGAGES IN SPAIN 

ONLY FOR FORMAL APPROVAL 

The documents required for a mortgage application will vary from bank to bank. Most will not require all the mortgage documents listed below, however for completeness we have included a comprehensive list of what banks could theoretically ask for. If we have a specific bank in mind for your application our mortgage advisor will send you a copy of the bank’s own checklist or an e-mail confirming exactly what is required, so we recommend that you wait for us to do this before starting to prepare your documents for the application. 

DOCUMENTS REQUIRED FOR ALL APPLICANTS 

  • Solicitors details (name, e-mail address and telephone number) 
  • Purchase or reservation contract 
  • Details of any significant non-debt related payments, such as private school fees,
    alimony (maintenance) payments or rental payments (marking bank statements clearly to highlight these is very helpful) 
  • Full UK credit report (for UK applicants go to www.creditexpert.co.uk and download the full Experian report in PDF format) or the equivalent for your home country, where available 
  • NIE number (if you already have it) 
  • Bank statement(s) showing the savings to be used for the deposit, fees and taxes (plus any other assets you can prove to strengthen your case, even if not to be used for the purchase e.g., managed funds, share portfolios etc) 
  • Estate agents details (name, e-mail address and telephone number) 
  • Current Nota Simple plus a web-link to the property 
  • Completed application form(s) 

SOMETIMES REQUIRED 

  • Details of other loans or debts in Spain, including bank receipts for last 3 payments where appropriate 
  • Bank reference letter, confirming the length of the relationship with the bank and that the accounts are maintained satisfactorily 
  • Latest annual mortgage statement for any properties you may own 
  • Latest 3 bank receipt slips for mortgages (if appropriate) on any properties already owned in Spain 
  • Utility bill (gas, electric or water) proving residence at current home address 

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