Mortgage Advice

Spanish Mortgage

Having your Spanish mortgage in place first reduces the risks of you losing a Spanish property that it has cost you so much to find, and means one less source of anxiety and pressure when you are trying to close on a Spanish property applying for a mortgage in Spain.

Depending on your current residence location Spanish banks provide a maximum mortgage coverage % of the value of the property.

  • For EU citizens it’s up to 70% of the property value
  • For non EU citizens, it’s up to 60% of the property value
  • For Spanish residents, it’s up to 80% of the property value

It is important to know that the property buying costs (approx 11.5%-14.5% of the sales price) are not covered by the Spanish mortgage.

 

Interest rates

Fixed interest rates – 3,0%, term up to 30 years depending on age.

Variable interest rates – First two years fixed 2,5% with following years Euribor +2,0%, term up to 30 years depending on age.

Offers are normally subject to economic situation/type of property.

General steps in the mortgage application procedure are:

 

Pre-approval

In order to explore the mortgage options, you can apply for a pre-approval. In this stage, the bank will tell you, based on the information you give to them, what type of mortgage and what kind of amounts you will be able to get. The pre-approval can be obtained by a questionnaire provided by the banks.

 

Submitting economic documents to the bank

Once we have a positive answer on the pre-approval application from the bank, they will want to see proof of the information you provided in the questionnaire.

 

Approval

The bank studies your economic documentation and confirms that the mortgage will be granted with general terms and conditions. Normally the bank will provide you with a percentage that you can borrow. Keep in mind that the final mortgage amount will be calculated by applying this percentage to the purchase price or valuation, whichever is lower.

 

Valuation of the property

Once you agree to the terms and conditions offered, the bank will send their surveyor in order to arrange the valuation of the property.

The valuation has an approximate cost of 350 – 700 €, which you must cover. This is why the valuation is only carried out once the previous steps are completed, the mortgage approved by the bank and accepted by the client.

 

Final mortgage offer

The bank will present the final mortgage offer based on the valuation results.

 

Administration office (Gestoria)

The bank will appoint an administration office who deals with the preparation of the paperwork and the calculation of costs and taxes involved with the mortgage.

 

The signing of title deed

The mortgage deed will be signed on the same day of the completion of the property purchase.