Spanish Mortgages

Posted by: Amy Cottrell about 11 years ago

Buying property in Costa Blanca is a great opportunity and sound investment for practically anyone. The real estate industry in Spain has enjoyed a steady increase in property value for the last five years and the numbers only continue to climb, well into the projected future. No longer are overseas properties just a venture for the rich, either. Thanks to the competition between local banks, a Spanish mortgage for your new property in Costa Blanca is just a few painless steps away.

When applying for a mortgage loan in Spain, it is very important to be familiar with the culture and Spanish law. For those who aren’t, it may be wise to retain an English-speaking lawyer to oversee the loan process and property purchase. (Always choose an objective lawyer that is not connected to the seller, real estate agency or bank.) Recently, legislation has begun to pass in Spain that protects buyers from those who might take advantage of them. Although one shouldn’t expect any problems with their Costa Blanca property, it is always good to be cautious when dealing with large amounts of money.

Banks in Spain want the business of real estate investors looking for property in the area. This is to the advantage of those seeking a mortgage loan, as competing banks will often try to match or beat their rivals. Never settle on the first offer. Instead, it is worth your time to compare various banks? interest rates. Bringing in offers from competitors may drive interest rate offers down even more, so don’t be shy in trying to haggle. Often, it will save a person thousands in the deal.

Mortgage loans in Spain will generally cover 60% to 80% of a property’s value. Residents are given better coverage than non-residents, which is often the case when one is buying property overseas. Provided that your credit is good and that the mortgage payments won’t exceed 35% of your monthly wages, then there shouldn’t be any problems in finalizing a mortgage loan.

Some interest rates are as low as 2.5% in Spain, although they are typically a bit higher. When compared to the US and UK, these rates are very desirable. Usually, a mortgage loan is signed at a 20-year term, although this may be something else to haggle about between competing banks. Once you decide on which bank to deal with and pay the setup fee, a mortgage is only a matter of filling out the proper paperwork. Be sure to have the following information handy.

You need the following documents to apply for a Spanish mortgage:

  • A copy of your passport
  • A copy of your last issued P45 document
  • A copy of your last 3 paychecks
  • A copy of your recent bank statements
  • Details of the real estate you are buying
  • Documents pertaining to any other sources of income

If you are an employer or are self-employed, you will require the following:

  • A copy of your passport
  • A copy of your last 3 years accounts
  • A copy of your last 3 years income tax returns
  • A copy of your recent bank statements
  • Details of the real estate you are buying
  • Documents pertaining to any other sources of income
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