obtaing a spanish mortgage
A UK mortgage provider will not give you a mortgage on a property in Spain. It makes sense to obtain a Spanish mortgage as the interest rates in Spain are generally more competitive.
The following information should make the process of applying for a mortgage, in Spain, that much easier.
How can I get a mortgage in Spain? – So that you may be considered for a mortgage in Spain, you will be required to open a Spanish bank account from which you will be required to pay your monthly mortgage instalments. Opening a Spanish bank account is easy and all that is required is a copy of your passport and proof of your address in the UK. Before your mortgage application is approved, you must be able to provide proof of your income.
How much can I borrow? - Typically in Spain, as a non resident, you will be able to borrow up to 70% of the value of your chosen property. Spanish mortgage providers will offer mortgages of up to four times your annual income. You also need to be aware of other costs associated with buying a Spanish property when considering how much you want to spend, as this can be as much as 12% in addition to the purchase price.
When buying a property you will be required to pay : 7% IVA (VAT), 2% Mortgage costs, 1.5% lawyers costs, 1.5% other – including notary and valuation fee – a bank will appoint a valuer for mortgage purposes, and they will require you to pay this fee up front which is usually around 500 Euros.
Can I have an interest only Spanish mortgage? - Many Spanish mortgage lenders will give the option to have your mortgage on an interest only basis. However, unlike UK mortgage providers, this is only fixed for a period of time – typically the first two years, and then it will switch to a repayment mortgage.
Do I need insurance on my property? - Yes, it will be a condition of your mortgage that you take out insurance through an approved insurance company.
What term can I repay my mortgage over? - This depends on your age. You can have your mortgage between 5 and 30 years.
