The process of obtaining a mortgage from a bank in Spain for your Spanish property is very different to obtaining a mortgage in the UK or other countries. If you speak good Spanish, have plenty of time available and a high tolerance level, you can arrange this yourself. Alternatively, let us save you time and definitely money as we know the best banks with the best deals.
We work on your behalf to obtain the most advantageous offer for your circumstances. We handle all applications in person rather than send them to the bank by fax. Our personal approach and the volume of Spanish mortgages that we place ensures that all of our clients' applications are processed quickly and favourably.
Most banks only offer non-residents up to 60% of the purchase price of the Spanish property but we can arrange up to 70% of valuation which is often higher than the purchase price. Banks talk about LTV (loan to value) representing the percentage that they are prepared to lend. NB Banks will generally lend up to 50% on a rustica which is an inland rustic property, typically a finca with land as opposed to a property on an urbanization.
Most banks limit non-resident mortgages to 15 or 20 years. We can arrange mortgages up to 30 years depending on your age. Banks usually limit mortgage terms to age 70 but our banks will sometimes add two or three years. They will consider a joint application with a younger applicant if he/she can prove separate income. Income from pensions must be supported by a statement from the pension company and tax forms.
Generally 80% of valuation for up to 30 years, sometimes 100%.
Residents in Spain with a permanent employment contract and at least two years with the same company and full declaration of income for tax purposes. Alternatively, a family member who owns their Spanish property outright can act as guarantor. A 70% mortgage is taken on your property and 30% on the guarantor's property. Banks will consider 100% loan up to 40 years depending on your age.
It is the other way round. Banks in Spain will consider granting a mortgage to an applicant who can prove taxable income to cover the repayments which should not exceed 30-35% of the net monthly income. They are rarely interested in the value of other properties you own, rentals received in the UK, money in offshore accounts or whatever. They simply want to know that you can pay the mortgage as it can take up to 20 years to repossess a property in Spain so they do not want to hold properties on their books.
No, because you need to provide documentation on a specific property and each application is judged on the value of the property, rather than just based on your income.
If you live and work in this country without paying tax, you are working illegally. It is immoral to benefit from the wonderful life here without contributing by paying tax. Do you seriously believe banks will look at your application favourably?
As a resident, yes.
The UK bank base rate, at the time of writing, is 4.75% so mortgage rates are higher. Spanish mortgages for non-residents are offered at 3 - 3.5%, usually quoted as Euribor + a percentage. The LTV (percentage offered) will usually be higher with a Spanish bank.
Ditto the comment on UK banks, with the rates perhaps even worse.
Rather than use your bank who will charge you a fee every month and apply the market rate, we recommend using Travelex who will not charge a fee and guarantee a more favourable exchange rate. They can arrange a monthly transfer to cover your mortgage and utility bills, as well as the cheapest way of sending money for the initial deposit on your Spanish Property property.
A selection of Spanish, British, American and German banks that all provide documentation in Spanish or English and sometimes in other languages.
Copy of your passport, NIE number, copy of P60 and last three months of payslips. Sometimes we also need bank statements.
Copy of your passport, NIE number, copy of your last tax return and a letter from your accountant.
Numero de Inscripcion de Extranjero - a Spanish tax identification number which you must have to own a property in Spain. We can arrange the application as you need the number before completion.
We need a nota simple (document proving the address, size, owner and whether there are any debts) which is available from your estate agent or lawyer and copy of the escritura (property deed).
If you own the land, we can arrange a construction mortgage on a draw-down basis, either monthly, quarterly or ad hoc payments when needed.
The bank can offer a re-mortgage on your property providing there is enough equity.
Providing there is enough equity, the bank will release funds as long as the investment is in Spain. They will not lend money to pay off UK credit cards!
Of course, if you can prove tax-declared income.
Yes, up to 50% of valuation.
Yes, usually up to 110% of the value of the new property to include 10% for purchasing costs.
Only one bank offers interest only low-start and for five years, sometimes ten. They need full documentation, carry out credit checks in the home country and contact your employer. They also take a long time to process an application. If your application meets their criteria, we can apply but prefer not to work with this bank. We can sometimes obtain one or two years interest only low start with another bank.
No. Spanish banks offer capital repayment mortgages so that the amount you owe is repaid over the term. If you wish to take out an endowment, you can arrange this yourself.
Most banks charge 1% of the amount repaid and this will be specified in your mortgage offer.
Once the bank grant approval in principle, they will ask you for a small fee to conduct valuation of the property. The fee depends on the value but typically will be 300 - 800 €. All banks charge an opening fee on mortgages which is included in the 10-12% of costs when buying a property. In addition, we charge an up-front fee which is extremely competitive.
If you have all of the documentation and the property is in a town, you can complete within two weeks but we generally allow six weeks.
We complete all applications and give them to the bank to "motivate the deal". Having built good relationships with the bank staff, we obtain good mortgage offers for our clients. We give you all the advice you need and hold your hand throughout the process to make buying a property in Spain as simple as possible.
If possible, we would like to talk on the telephone to find out exactly what sort of mortgage would be best for your circumstances. For this reason, we do not use a standard application form via e-mail like many other brokers. Please contact us by telephone on +32 11 28 11 32 or by email bev@sjmarbella.com with full contact details.