can I obtain a Spanish Mortgage?
spanish mortgage are available from most of the major banks
in Spain, the UK and lenders in Gibraltar. Also, many new properties
under construction on the Costa del Sol are already mortgaged
by the developer as a means to raise capital to fund the construction.
A purchaser, under the direction of a Spanish lawyer, can take
over such a mortgage when purchasing the new construction. In
this case the mortgage may be up to the value of 80%. In some
cases resale properties are also offered for sale with a mortgage
in place. Your lawyer should check out the terms and conditions
applying to the mortgage, and advise you accordingly. Mortgages
in Spain are attached to the property and written into the title
deeds, so it is most important to use a Spanish lawyer who is
familiar with this, as the mortgage is on the property and not
the person who takes out the mortgage.
What is the cost of arranging a Spanish
Unless you are purchasing a property with a mortgage already
in place, [see above] the cost to arrange a mortgage will be
around 1% to 1.5% of the amount advanced.
How much can I borrow?
As a general guide a non-resident will be able to borrow around
60% of the valuation of the property. Residents can borrow around
80% of the valuation.
Should I have a Spanish euro mortgage?
If you borrow in a currency that does not have a fixed value
against the euro e.g. sterling, currency fluctuation could make
your borrowing more expensive or less expensive depending on
the exchange rate at the time. Spanish Mortgages Solutions would
advise you to borrow in the currency from which you derive most
of your income.
What interest rate will I pay?
Interest rates will again depend on the currency in which you
choose to borrow. Interest rates for mortgages in euros are
based on the Euro Interbank Offered Rate, (EURIBOR). The lenders
rate will be a margin over Euribor, generally Euribor + 1.25%,
but certain lenders may fluctuate on this. Fixed rate mortgages
are available at slightly higher interest rates. For more information
on EURIBOR, go to http://www.euribor.org
How often are rates reviewed?
Usually once a year.
What is the cost of early repayment of
a mortgage in Spain?
From zero to 1% depending on the type of loan. Some lenders
only charge for cancellation in the first five years, others
make no charge at all. It is important to choose your lender
carefully if you intend to repay your loan early.
What information will the lender require?
Banks vary in the amount of information they require. As a
general guide you can be expected to be asked for the following:
- Last 3 wage/ salary slips.
- Last Income Tax declaration/P60 in the UK, or evidence
of latest annual tax declaration.
- Copies of your current bank statements covering the last
- Reference letter from your employer confirming date of
employment and proof of income (not always essential but helpful,
especially if you want to achieve the maximum amount of borrowing).
- Copy of passport/residencia.
If you are self employed:
- Latest Income Tax declaration.
- Copies of the accounts for the last two or three years.
- Chartered Accountants Company report, confirming your annual
personal drawings from the company.
- Personal bank statements.
- Bank reference letter.
- Copy of passport/residencia.
What about bank charges?
Bank charges for maintaining an account and commissions for
transferring money, vary considerably from bank to bank. Some
provide good online banking, which can be useful for transferring
funds and paying bills in absentia.
Which lender should I choose?
Spanish Mortgage Solutions offer a mortgage advisory service
which is offered free of charge to our clients. Our independent
mortgage advisors are well known and respected by the banks
in the area. Our ability to introduce you to the relevant bank
with all the necessary paperwork completed will speed up the
mortgage process to a successful conclusion.
If you require any further information or have any questions,
please do not hesitate to contact us for no nonsense Spanish