MY COSTA BLANCA VILLA

You may be considering getting a mortgage if you want to build or buy your own home in Spain.

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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.

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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.

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• 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.

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To obtain a mortgage in Spain, you must meet the following requirements:

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• 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.

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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.

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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.