Spanish Mortgages
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Mortgages

Financing a property in Spain is relatively straight forward and we at The Overseas Living Group can help you through the whole process.
It is possible to approach a Spanish lender direct but with the difference in language, culture and the vast array of banks and products available we recommend that you speak with an authorised Mortgage broker.

If you would like some specific information or a personalised quote please complete the enquiry form below.
Here are some keys facts regarding the current situation re mortgages in Spain.

What is the maximum loan to value I can get?

70% is currently the maximum a non resident can obtain.
If you have previously owned a home in Spain in may be possible to obtain more.
Residents of Spain can obtain up to 100%.

What income do I need to show?

There are currently no "self certificated" mortgages for non residents so the banks will want to see confirmation of income - tax returns, pay slips, work contracts etc. How they calculate affordability varies from bank to bank but generally they will use your net income to determine what you can afford. That is your income after your fixed monthly costs such as loans, current mortgages etc.

What are the current Interest Rates?

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Rates are linked to the European "Euribor" rate and then each Bank will add their margin to this rate.
Final rates vary considerably from 2.25% to 5.4%. It's important to shop around or let a mortgage broker shop for you.

Set up costs

To set up a Spanish mortgage you should allow 5% of the amount borrowed.
This will include:-
  • The Banks arrangement fee of between 1% and 2%.
  • Broker fee of up to 1%
  • Tax - varies by region but typically 1.8%
  • Various notary, land registry and valuation fees.

What documents will I need?

You're most likely to be asked for the following:
  • Passport
  • Proof of address (at least two documents, e.g. utility bill, council tax bill)
  • Last three to six months bank statements
  • Last three months pay slips for proof of income and outgoings
  • Last P60
  • If self-employed, the last two/three years accounts and tax returns

What should I look out for?

There are a few things that you need to be careful with and a good broker will make sure the add on's and extras do not make a cheap looking mortgage into an expensive one.
  • Most Banks will want and try to sell you additional products - life assurance, home insurance, current accounts etc. Some of these can be useful and some will be compulsory but costs need to be compared and the overall cost of the mortgage needs to considered.
  • Early repayment penalties - you may want the flexibility to repay the mortgage early or make lump sum reductions periodically. It's important to check that restrictive penalties do not apply.
  • 1st year repayments - banks will often quote a different rate for the first year (or even 3 years). This is sometimes much lower than the rate that the mortgage will default to after the initial period. This can be useful in keeping repayments down during the early period but it's something you should be very aware of.

Classification of land

There are different classifications of land in Spain. Banks will lend against property on Urban land but very few will lend on property registered as Rustica land, and if they do it will be at lower loan to values.

Subrogation

In Spain the mortgage is attached to the property and can be transferred to a new owner. This can be a relatively cheap way of obtaining a mortgage as various set up costs are saved. If you are looking to buy something with a mortgage in place please contact us to find out which properties are currently for sale and offering this facility.


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