Spanish Mortgage Guide

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Spanish Mortgage Guide

Best Value Mortgage in Spain

Below is a general guide to buying property in Spain using a mortgage. Numerous websites offer similar information although the vast majority are out of date. We ensure that the information we provide is as up to date as possible but best advice is to contact us for personal advice in respect of your circumstances.

The lending criteria and earnings multiples quoted are the standard terms that are available. Very often our good relationships with lenders (and even particular branch managers) means we can often bend the published ‘rules’ to help our clients.

Send us an enquiry to receive details of our latest available deals, and more details of the costs involved in setting up your mortgage in Spain.

1. Standard Loan to Value percentages with most lenders is 70%. Some lenders will ignore your purchase price entirely, whilst others will limit lending to 80 or 90% of the purchase price. A number of lenders will give mortgages to 80% of the valuation. More documentation is generally required with these lenders
2. If you are buying a property with a Spanish mortgage, or remortgaging to change lenders or release equity, you should be allowing around 13% for total costs, not the usual rule of thumb of 10%. This ensures no nasty surprises and possibly some money left over in your budget. Mortgage costs can amount to around 3-4% of the mortgage amount.
3. Banks in Spain generally charge an arrangement fee of 1% of the mortgage amount. Some lenders will charge up to 2% but we will not use these for our clients unless absolutely necessary.
4. There is a stamp duty (known as AJD) of around 1.8% of the mortgage amount. This is a tax based on the total interest liability of the mortgage. Always ensure that when comparing quotes you are including all costs of obtaining a mortgage in Spain.
5. There will be additional notary and land registry fees to pay in respect of the mortgage in Spain . If you are purchasing a property you will incur notary and land registry fees for both the property and the Spanish mortgage.
6. If you are 'employed' we will need P60 and 3 recent payslips as a minimum.
7. 'Self-employed' clients will need up to 3 years Tax returns and audited accounts, depending on the lender.
8. Some banks may also request extra information such as bank statements, bank reference, employer's reference, UK mortgage statements, Experian or Equifax reports.
9. UK pension income and income from investment properties can be considered as income for a Spanish mortgage.
10. Monthly mortgage payments should not exceed 35-40% of your net monthly income. We have lenders that do not need full disclosure of your UK commitments.
11. Expected rental income of the property in Spain will not be taken into account by Spanish banks when calculating affordability, although they do appreciate that it does exist.
12. Traditionally terms of only 10 or 15 years were available from Spanish banks. Now, however, you can repay your mortgage over up to 40 years or until you are aged 80.
13. Self-certificate mortgages are now available in Spain , up to 60% of the value of the property.

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If you would like more information on mortgages in Spain then please get in touch with us.

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For advice and a free quotation please fill out a Spanish mortgage enquiry.

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