To determine what you can borrow, lenders look at your ability to pay and typically allow between 30% and 35% of your joint net monthly income, to pay for all static debts (including the new Spanish mortgage). Income proof is accepted in many forms, if provable, including rental incomes, company dividends, bonuses and pension receipts, but all must have supporting documentation. The list of documents required can be found in the 'Documentation Required' tab.
There are a number of charges that you must take into consideration before you purchase your new property in Spain. At the moment, a general guide is 14-15% of the declared purchase price if you are buying by way of a mortgage. Below you will find an outline of what to expect. Any figures or percentages quoted are for guidance only.
To be classed as a resident (one who pays Spanish Income Tax) usually you need to be paying these taxes before you apply. Some banks will class you as a resident with as little as 6 months payslips, if it is clear that you are in a long-term job with a reputable company. Others may need to see at least one annual Spanish Tax Return (Declaraciones de Renta).
· Non-Residents - Maximum of 70% loan to value. The mortgage payments cannot exceed more than 35% of the client´s disposable net income. This is how the affordability is calculated. Interest rates can be obtained from 2.25% reviewed annually according to EURIBOR (Central Bank of Europe Base Rate). The maximum term available is 25 years with the mortgage having to be paid off by the time the client is 75 years’ old
· Residents - Maximum of 80% LTV. Same rules apply. Interest rates from 1.65%. Maximum 30-year term with the mortgage having to be paid off by the time the clients are 75 years’ old
We are also able to offer commercial lending with a maximum of 50% of the purchase price. Self-build mortgages (up to 60% of the (GDV) gross development value, in cases where clients own the land already. There are selected banks that lend on land on a case by case basis
The timescales involved vary from bank to bank and at different times of the year. We usually say to allow between 4-6 weeks for the whole process and it can take up to 8 weeks to complete, sometimes longer if the holiday month of August falls in between, or if you have a complicated profile.
Not necessarily. We work with all Spanish and International banks lending in Spain.
This will depend on your circumstances. There are a number of products on the market and we will discuss your requirements with you before recommending a suitable product.
This is an identity number for foreigners who register with the authorities in Spain and applicants will receive an official document with their name and number. This number must be presented for various official transactions and it is essential to have an NIE number if you wish to buy a property in Spain. Applying for the number is done via an office of the National Police (Policia Nacional).
We strongly recommend that you appoint a lawyer. They will ensure that all the necessary checks are carried out on the property. If anything goes wrong, a lawyer’s job is to protect your interests. We recommend that you appoint a fully qualified lawyer who is registered with the College of Lawyers (Colegio de Abogados). If you do not feel you have been sufficiently protected, you can lodge a complaint to the College of Lawyers and claim compensation.
In most cases, there is a redemption penalty of 0.5% of the amount paid off (partial or full) in the first five years and 0.25% of the amount thereafter.
The bank arranging the mortgage will have a panel of companies they use and will usually select one at random. All companies have to be approved by the Bank of Spain.
It is compulsory to have buildings insurance with an insurer of the banks choice. In addition, life insurance is nearly always compulsory, also with an insurer of the banks choice. We are aware of which banks that do not require it.
In nearly all cases, the mortgage will be a repayment mortgage, which means the monthly payment is made up of both capital and interest. Your mortgage will be paid off in full at the end of the term. Some lenders allow you to pay interest-only during the first one or two years of a construction mortgage, but not for the purchase of an existing property.