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Mortgage applications in Spain

Mortgage applications in Spain

There has never been a better time to apply for a mortgage in Spain.

Mortgages are presently offered with very low rates of interest. There are incredible long term fixed rate deals available from a number of Spanish lenders.

In the recent past, the set up costs for taking out a mortgage in Spain have been the main drawback.

The various fees and taxes made mortgages much more expensive to take out than in the vast majority of countries.

There were separate notary fees, land registry fees, mortgage arrangement fees (usually 1%) and a tax payment.

The total could often add up to an additional 3% on top of the purchase price of a property.

The recent court ruling in Spain has outlawed these costs.

Now the only expense payable by the borrower is the property valuation. The cost of which is normally between €300.00 – €500.00.

The other costs are payable by the mortgage lender.

Whilst some banks have made an adjustment to their interest rates in order to compensate, the rates in general are still extremely attractive.

An example of a current offer is as follows:

  • Term: 20 years
  • Interest Rate: 2.75%
  • Type: Fixed rate for full term
  • Loan to value: 60% non residents/80% residents

The majority of banks request the following documentation from international applicants:

  • Copy of passports
  • NIE certificates
  • Proof of address (main residence)
  • Last 3 wageslips (if employed)
  • Most recent tax return (if employed)
  • Last 2 tax returns (if self employed)
  • Last 2 years annual accounts (if self employed)
  • Employer or accountants reference (upon request)
  • Credit report from home country
  • Last 6 months bank statements showing income

The bank branch will submit the application to their risk department. Following approval in principle, the bank will request payment for the valuation and the visit to the property will be arranged.

The valuation result typically takes one week.

A formal offer will then be provided in writing.

If you are considering purchasing a property in Spain, please don’t hesitate to contact us.

GB Abogados offer no obligation consultations during which any question that you may have relating to buying a property or obtaining a mortgage can be answered.

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