Requesting a Mortgage in Spain
Not only is Spain an ideal place for a home or second residence, it may now also be one of the best places to request a mortgage.
Spanish law provides for strong consumer protection and mortgage transparency Interest rates are lower than ever before, long-term endowment mortgages are becoming much more frequent and a loan can now be taken out in pesetas or in euros. In addition, the repayment period can range from five to twenty years or more.
Two important factors to keep in mind when considering requesting a loan are:
a) the value of the property you are interested in purchasing and
b) your income.
The official value of your house is key not only to make sure the asking price is on target, but also because most financing entities will lend a maximum of 70 to 80 per cent of this value. The percentage lent will depend on the financing institution and whether or not the applicant is an official resident of Spain.
All financing institutions are required to have detailed written information available regarding their loans. Most also make the information available in English. Be as informed as possible before making any decisions or commitments.
The main thing to keep in mind is to be properly informed and to shop around and compare before deciding on whether or not to request a loan and from what financing entity.
Spain like the UK, offers several kinds of mortgages: fixed interest rate mortgages, variable interest rate mortgages, mixed interest rate mortgages and fixed repayment installment mortgages.
You will need to provide the financing institution with an identity card and a fiscal identification number as well as certification of your income or financial situation. If you are married, your spouse's consent may also be requested.
You should seek sound legal advice from a Spanish professional able to act in your interests, be the person a lawyer a registered
real estate agent, a gestor; specialized in the type of property you are looking to buy or an administrador of fincas.
If you choose a
real estate agent, we recommend only those in position of a specialist title: API or GIPE one. Many real estates are only trading with little
legal knowledge. In Sol Riviera® our team have a degree and GIPE specialist title in real estate.
Your elected professional advisor will check that the property is registered in the seller's name at the Spanish Land Registry and that there are no charges against the property (this is shown in the Land Registry).
They will also ensure that the receipt for the annual Real Estate Tax (IBI; Impuesto de Bienes Inmuebles), and the Community of Owners fees have been fully paid.
Expenses you should keep in mind related to a loan transaction are as follows:
Property valuation costs, financing institution charges, a stamp tax of between 1.5% and 1% of the amount of the mortgage loan, land registry and notary public fees.
Click here to learn more about buying a property on the Costa del Sol