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Who offers mortgages for properties in Spain?
Mortgages are available from most of the major Spanish banks and savings banks (Caja) and from a few British lenders based in Gibraltar. Furthermore, Wallace Church & Associates S.L. has access to funds through a Luxembourg-based private banking group who are able to assist with larger or more complex lending arrangements that are outside the scope of Spanish lenders. Sterling mortgages for properties in Spain can also be obtained from a limited number of UK lenders, but interest rates are invariably higher than those available in Spain. Wallace Church & Associates S.L. can obtain such mortgages, if required, through our associate company in the UK.
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What interest rate will I pay?
Interest rates will depend on the currency in which you choose to borrow. Interest rates for mortgages in Euros are based on the European Central Bank’s Interbank Offered Rate or EURIBOR. The current EURIBOR can be obtained from either the financial press or the internet.
The mortgage lender’s rate will be a margin over EURIBOR. This margin will nornally be 1% - 2%, but an individual’s circumstances can dictate either higher or lower rates.
Some lenders may offer a lower initial interest rate for periods of six to twelve months, but care should be taken regarding the subsequent interest rates that may be charged.
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What is the maximum repayment period?
Most commonly 10, 15 or 20 years, but terms up to 30 years can be arranged. Most lenders will require that the mortgage should be redeemed by the age of 70.
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What will it cost to repay the mortgage early?
From nothing to 1% depending on the lender, the loan and the interest rate being paid. Some lenders charge for early repayment only in the first five years whilst others make no charge at all. It is therefore important to choose your lender carefully if you believe that you will be repaying your mortgage before the end of the original mortgage term.
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What information will the lender require from me?
Lenders vary in the in the amount of information that they will require to consider your mortgage application. It would therefore be wise to prepare as much of the following as possible in advance:
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If you are employed:
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Copies of your last three
month’s pay slips
•
Copies of your last year’s
income tax declaration (P60 in the UK) and your latest annual tax
return
•
Copies of your last three
months bank statements
•
Proof of any other income
such as income from investments, property rental, pensions,
dividends etc.
•
Copy of your passport if
you are not a Spanish resident together with your Residencia if you
are
•
A statement of your
worldwide assets and liabilities
If you
are self-employed:
•
Copies of your accounts
for the past 3 years
•
Copy of your latest annual
tax return
•
Copy of your passport/Residencia
•
Copies of your last three
months personal and business bank statements
•
Proof of any other income
such as investment income, pensions, property rental income etc.
•
A statement of your
worldwide assets and liabilities
You will also need:
•
The Nota Simple from the
property registry in relation to the property that you are
purchasing, and the offer letter or sales purchase contract. This
document can be obtained on your behalf by the estate agent or your
lawyer
•
You will
also need to open a Spanish bank account from which your mortgage
payments will be made. Wallace Church & Associates S.L. will do this
on your behalf if you are not in Spain to do it for yourself.
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Which lender should I choose?
Spanish national and regional banks are generally the best bet, however Euro mortgages from UK lenders in Gibraltar now compare
favorably with Spanish mortgage product sold also be considered. Because of the many variables in the mortgage market, you will need to be take into consideration the location and the type of property being purchased, any current special deals being offered by the banks and the terms and conditions of the various mortgage packages available. When you choose to use our services, we will select a range of mortgages for you and make a recommendation to you as to which we consider to be the most appropriate for your particular circumstances.
Having selected your mortgage, we will complete all of the relevant paperwork on your behalf and submit it to the lender. We will then keep you advised of your application’s progress until the mortgage offer is received.
We can also introduce you to one of a panel of English-speaking Spanish lawyers who will complete all the necessary legal work to transfer the property into your name, whilst at the same time protecting your interests before and during the transfer. Your lawyer will also assist you in obtaining your N.I.E. number. This is a fiscal identity number and as a property owner, Spanish law requires you to obtain this. In addition, your lawyer will advise you on, and draw up, a Spanish will for you, which as a property owner we strongly advise you to do.
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Need a mortgage in Spain?
