Applying for a mortgage in Spain can be very complex. You are a foreigner who request for a mortgage at a Spanish bank. You need to deliver a lot of documents and you need to show a good basic financial situation in your home country. Based on this information the Spanish bank will provide you a mortgage. But do you know how to negociate in the Spanish language? What the best deals are? Profesional advice is in this is therefore very important. Mortgage in Spain has multiple years of experience in Spain and knows the way in it’s rules and regulations. We are here to help you!
The rules in acceptance and conditions at a Spanish bank may probably differ a lot from your country. Did you know, for example, that a mortgage in Spain must be repaid before the age of 75? In order not to get surprises along the way, get yourself well prepared.
In Spain they only know an annuity mortgage, there are no other possibilties. You are eligible for a mortgage when you have a monthly income of a permanent job or from your own company. The risk department of the bank wants to see a steady income over the last two years.
To calculate the possibilities of a mortgage the Spanish banks use the DTI (Debt-To-Income) rate. In this a maximum of 35% of the joint net income can go to the joint mortgage or rent payments. This means the mortgages in your own country plus the new mortgage in Spain. The other monthly credit obligations are also considered in this calculation. If you exceed this 35% matter you will be rejected at a Spanish bank.
You always need to bring own equity for purchasing a house in Spain. The mortgage can not cover the purchase price totally. A Spanish bank will provide a mortgage of maximum 70% of the lowest value of the property. This means the mortgage is based on the purchase price or the valuation of the property. In case the valuation of the Spanish house is lower then the purchase price, the mortgage will be lower as well.
Besides financing a minimum of 30% of the purchase price out of own equity, there are also additional costs. Our estimation of costs is an extra 10% over the purchase price. You can not include these costs into the purchase price, these costs you need to pay out of your own equity. The additional costs includes the transfer tax of the property (8%), notary costs and registration costs. Voluntary other costs like services for an estate agent or lawyer are not considered in our given estimation.
The next documents are required for a mortgage application at a Spanish bank:
• Tax declarations of the last two years
• Prove of income with three salary slips (permanent job)
• Prove of income with annual overview of your company
• Recent annual mortgage overview or rental contract of first property.
• Overview credit registration
• Prove of own equity (bank statement saving account)
• Copy of valid passport
• Copy of NIE number
• Copy of Nota Simple
In case ther are two applicants, you need to deliver these documents twice.