4. MORTGAGES IN SPAIN.

In Spain it is possible for foreigners and non-residents to obtain a mortgage. We have a department within our firm dedicated to mortgages which can assist you in finding the mortgage option most suited to your needs.

4.1. REQUIREMENTS

In order to obtain a mortgage in Spain you must meet a series of requirements related to your ability to meet payments and also the value of the property being purchased.

The quota will never exceed 30% or 35% of the net monthly income of the applicant and the maximum re-payment period is 30 years. In Spain, mortgages are given up to the age of 70.

4.2. AMOUNT REQUESTED

As part of your mortgage application process, the bank will commission an official, certified and independent valuation company to carry out a valuation of the property. This company will provide an official report on the value of the property, which becomes the guarantee for the recovery of the loan in case of non-payment.

With regard to the mortgage amount, the official loans offered by banks are, as a general rule, up to 70% of the valuation value of the property for non-resident clients and up to 90% for residents.

As with any mortgage, the property acts as a guarantee; if the client cannot meet payments, the mortgage lender can repossess and sell the property to recover its money. Therefore monthly payments must be kept up by the client.

4.3. TYPES OF MORTGAGES

The most common type of mortgage in Spain is the capital and interest or repayment mortgage. However, in a competitive market, mortgages with an initial exclusion period are becoming increasingly popular.

In capital and interest mortgages, the loan is returned by paying part of the capital monthly, together with the interests generated. This way, the loan is returned completely once the repayment period has ended.

On the other hand, mortgages with an initial exclusion period consist in initially paying only the interests, and returning the capital at the end of the repayment period. During the initial period, clients only pay the interests on the loan, and none of the capital.

4.4. NECESSARY DOCUMENTS

You will need certain documents in order to apply for a loan, which vary depending on whether the applicant is employed, self-employed or retired:

Employed:
 
  • Last three pay slips.
  • Tax return from last two tax years.
  • Company certificate confirming salary and length of time at company.
  • Bank statements for last three months.
  • Reference letter from bank.
Self-employed:
 
  • Tax returns for last two tax years.
  • Report by accountant.
  • Bank statements for last three months.
  • Reference letter from bank.
Retired:
 
  • Last three pension slips.
  • Tax return from last two tax years.
  • Bank statements for the last three months.
  • Reference letter from bank.
   

4.5. MORTGAGE COSTS

In addition to valuation costs, there are other necessary costs related to setting up a mortgage in Spain, including the opening commission (normally between 1 and 1.25% of the loan amount), Notary’s fees, Property Register, legal fees and the tax on Documented Legal Procedures.

If you are interested in obtaining a mortgage, we can draft a detailed list of all associated costs related to setting up the mortgage, once we know the amount you are allowed to borrow.

Another legal requirement in setting up a mortgage is purchasing an insurance policy on the property and its contents. Our firm can assist you in this as well.


THE PROCESS OF BUYING PROPERTIES IN SPAIN
BASIC NECESSARY FORMALITIES IN SPAIN
TAXES IN SPAIN

MORTGAGES IN SPAIN
MORTGAGES CALCULATOR
CURRENCY AT MONEYCORP.COM


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