Buyers Guide

4. MORTGAGES

In Spain, foreigners and non-residents can apply for a mortgage with Spanish banks. Our staff can assist you in finding the mortgage option most suited to your needs.

4.1. REQUIREMENTS

In order to obtain a mortgage in Spain, you must meet a series of requirements related to your ability to meet payments and also the value of the property being purchased.

The mortgage repayment will never exceed 30% or 35% of the net monthly income of the applicant and the maximum re-payment period is 30 years. In Spain, mortgages are normally granted until the age of 70-75.

4.2. AMOUNT REQUESTED

As part of your mortgage application process, the bank will commission an official, certified and independent valuation company, to carry out a valuation of the property. This company will provide an official report on the value of the property, which becomes the main direct guarantee for the recovery of the loan in case of non-payment.

With regard to the mortgage amount, the official loans offered by banks are, as a general rule, up to 60%-65% of the valuation value of the property for non-resident clients, and up to 80% for residents.

As with any mortgage, the property acts as the main guarantee; if the client cannot meet payments, the mortgage lender can execute the property, and eventually, repossess it and sell it to recover its loan.

4.3. TYPES OF MORTGAGES

The most common type of mortgage in Spain is the capital and interest or repayment mortgage. In capital and interest mortgages, the loan is returned by paying part of the capital monthly, together with the interests generated. This way, the loan is returned completely once the repayment period has ended.

4.4. NECESSARY DOCUMENTS

In order to obtain a mortgage in Spain, you must meet a series of requirements related to your ability to meet payments and also the value of the property being purchased.

Employed:

• Last three pay slips.
• Tax return from last two tax years.
• Company certificate confirming salary and length of time at company.
• Bank statements for last three months.
• Bank statements for last three months.

Self-employed:

• Tax returns for last two tax years.
• Report by accountant.
• Bank statements for last three months.
• Reference letter from bank.

Reference letter from bank.

• Last three pension slips.
• Tax return from last two tax years.
• Bank statements for the last three months.
• Reference letter from bank.

4.5. MORTGAGE COSTS

Apart from the monthly interests and repayments, there may be costs related to setting up a mortgage in Spain, like the opening commission, insurance, legal fees, etc. Another legal requirement in setting up a mortgage is purchasing an insurance policy on the property and its contents. Eventually, the bank could also demand to contract a life insurance policy.