The Spanish mortgages Process | Spanish mortgage information

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The Spanish mortgage process
When you have the property purchase agreed you can instruct OLG to go ahead with the mortgage application process. This will include property valuation, collecting the relevant documents and making arrangements with the vendor’s lawyers, the bank and the Notary.

Your lawyer will complete the searches and investigations of the property and will arrange with the owner the procedure for the cancellation of any debts. When the valuation has been completed successfully we will obtain from the lender a “formal offer of funding” this clearly states that based upon the application form submitted and the property, as valued, the lender is actually offering provide you a mortgage of X amount. We arrange with your lawyer a date for completion of the transaction; this is when all the parties and or their representatives meet at the Notary office for final signature of documents. It is important to remember that it will be necessary to open a bank account in Spain and obtain an NIE number.

Approval in Principle
This is when a lender confirms they are willing to offer you a mortgage. It is always best to get an approval in principle as soon as you can, so that you know what your true budget is for a property purchase in Spain. Even if you can pay 100% cash it often makes sense, for many reasons, to use a mortgage. Before you commit to buying a property make sure you first secure your mortgage.

Spanish Interest Rates
In Spain the cost of borrowing is currently lower than in the UK. The interest rates offered by the different lenders are based upon the Euro. In the UK the cost of most mortgages are directly related to the Bank of England base rate. In Spain I am afraid it is not quite so straightforward because different lenders will use a different benchmark for pricing their mortgages. Some will use the EURIBOR 12 month rate and some will use the EURIBOR 3 month rate and there are many others such as the Madrid interbank rate, the Eurolibor rate, IRPH rate (Indice de Referencia de Prestamos Hipotecarios) set by the Bank of Spain. This is another good reason to speak with one of our qualified mortgage advisors based in Spain so you can get the product that best fits with your own needs.

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Please Note

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. CHANGES IN THE EXCHANGE RATE MAY INCREASE THE STERLING EQUIVALENT OF YOUR DEBT.

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