You may be considering getting a mortgage if you want to build or buy your own home in Spain.
More information about the conditions and working methods can be found below. This is merely a precis, so you get a rough idea how things work.
There are several possibilities to finance the purchase of a property in Spain, whether its for an off-plan, new build or buying re-sale property.
You can finance the purchase of a property from your own funds.
You can take a 2nd mortgage on your existing home, provided there is sufficient equity.
You can apply for a mortgage with a Spanish bank.
To obtain a mortgage in Spain, you must meet the following requirements:
You must finance at least 40% of the purchase price from your own funds.
Banks generally finance 60% to a maximum of 70% of the purchase price of the property. In addition, you must also pay ‘buyers costs’ (transfer tax, notary and registration) approximately 10% from your own funds. In total, you must therefore contribute between 40% and 50% from your own funds.
Most commonly banks will offer variable or fixed term contracts for a maximum term of 20-25 years. Interest only mortgages are rare.
The set-up cost of a mortgage will be around 4-5% of the amount borrowed.
To get a mortgage loan in Spain, you always have to prove your income. This can be your income as an employee, a pensioner or as a self-employed person, rental income or income from capital. An entrepreneur must be able to show the balance sheets / financial statements for the last two years of business. In general, you may spend 35% of your net income on housing costs.
The assessment of your personal situation
In addition to the income criteria, the bank assesses a mortgage application on family composition, whether you have a rental or owner-occupied home, number and age of children, type of work, type of income, etc.
The duration of the mortgage process
The total mortgage application, from presenting your file at the bank to passing through the notary, takes an average of 6-8 weeks.