The following information is a guide to obtaining mortgage finance for buying a property in Spain. The information contained herein, should be viewed as a reference guide. due to the ever changing Spanish Mortgage market we have teamed up with a National Independent Mortgage Broker, Spanish Mortgage services S.L. to provide the information contained within the guide.
If you are serious about buying in Spain then you should think arranging your Spanish mortgage prior to searching for your property.
There are many advantages in arranging your Spanish mortgage at the start of your property search:
·It costs you nothing
·It helps you make the best decision as to how much to borrow
·It allows you time to find a mortgage that best suits your requirements so that you avoid overpaying
·You will have a better idea of how much you can spend on your Spanish property
·You can work out the likely future financial implications of your purchase.
Remember, mortgages may run for many years so you will have to live with the consequences of your decision for years to come.
Documentation required for your Spanish mortgage
As a basic guideline the following documents are required to verify your income:
·Copy of your passport
·3 months’ personal bank statements illustrating declared income and outgoings
·3 most recent wage slips, plus your latest P60
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If self-employed:
·Audited accounts for the last 2 years
·Last 2 years’ tax returns
·Letter from your accountant confirming your income and tax payments for the previous year
·Proof of any other sources of income that you may wish to borrow against
·Copy of any tenancy agreements on buy-to-let properties
·Details of any pension you may be receiving.
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Fees Involved
On average, the cost of buying a property in Spain will be in the region of 10 to 15% of the purchase price depending on the complexity of the procedure and the area of Spain in which you are buying.
·The Notary fees are established by law and depend on the mortgage value
·The Registry Fee/Land registry is usually 0.25% of the value of the mortgage
·The Property Tax is 7% of the declared purchase price
·The cost of the Property valuation depends on the value of the house usually it is from 0.80 to 1.5%
·Spanish lenders will charge you an Opening Fee of between 1 and 2%
·Stamp Duty (AJD) is paid to the government and is calculated as a percentage of a Spanish mortgage (between 0.85% and 1.75%).
Mortgages in Spain are far easier to get now than they were just 10 years as there is a larger of range of products available. With over 100 lenders available to choose from, it is a good idea to tailor a mortgage to your individual needs. Interest rates in Spain are still significantly lower than in the UK and other parts of the world which means your money could go a lot further than you think. And when it comes to arranging a mortgage, you could be in for a pleasant surprise when you find out how much you can afford.
