In Spain it is possible for foreigners and non-residents to obtain a mortgage. In our firm, and from our specialised department, we can help you find and choose the mortgage option most suited to your needs.

REQUIREMENTS

Obtaining a mortgage in these cases - as is the case with residents in Spain- entails meeting a series of requirements related to the client's ability to meet payments, as well as to the value of the property that he or she wants to purchase.

The quota will never exceed 30% or 35% of the net monthly income of the applicant.

Taking into account the years when the mortgage loan can be returned, the maximum re-payment period is 30 years. In Spain, mortgages are given up to the age of 70

WHAT AMOUNT SHOULD YOU REQUEST?

As part of your mortgage application process, the bank will commission an official, certified and independent valuation company to carry out a valuation. This company will provide an official report on the value of the property, becoming the 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 70% of the valuation value of the property for non-resident clients and up to 90% for residents.

In a mortgage, the property acts as a guarantee; if the client cannot meet payments, the mortgage lender can repossess and sell the property to recover its money. This is why it is very important for the client to rigorously meet the monthly payments of the mortgage loan.

TYPES OF MORTGAGE

The most common type of mortgage in Spain is the capital and interest or repayment mortgage. However, in a competitive market, mortgages with an initial exclusion period are becoming increasingly popular.

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 when the repayment period has ended.

On the other hand, mortgages with an initial exclusion period consist in initially paying only the interests, and returning the capital at the end of the repayment period. During the initial period, clients only pay the interests on the loan, and none of the capital.

NECESSARY DOCUMENTS

You will need certain documents in order to apply for a loan, which vary depending on whether the applicant is employed, self-employed or retired:

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.
• Reference letter from bank.

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

MORTGAGE COSTS

In addition to valuation costs, there are other necessary costs related to setting up a mortgage in Spain, including the opening commission (normally between 1 and 1.25% of the loan amount), Notary's fees, Property Register, legal fees and the tax on Documented Legal Procedures.

If you are interested in obtaining a mortgage, we can draft a detailed list of all associated costs related to setting up the mortgage, once we know the amount you are allowed to borrow.

Another legal requirement in setting up a mortgage is purchasing an insurance policy on the property and its contents. We can offer you different quotes, carrying out the necessary procedures.