Getting A Mortgage In Spain As An Expat – A 2020 Guide

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Peace and conform are indeed the two potent modalities that are associated with living an eminent lifestyle. To most of the people, it may sound a dystopia; however, things could be achieved if done rightly. Being able to live at a place where you can lead a happy and contented life can lead you to the real sustenance. Out of all the astounding places that are famous for living, Spain is a country that is often trivialized. Having an opportunity to live in a country like Spain could be the best decision you could ever make.

You being here is a clear indication that you have been thinking of living in Spain lately. Then certainly you must be fascinated to now that you are among the 75% of the people who are willing to buy a property in the said country. In 2019, the number of mortgages to finance property in Spain was 357.7 thousand. The mere happiness doesn’t just lie here. According to most of the people getting a legal property or house in Spain is a difficult task. To prove that wrong, we have mentioned the most critical aspects which can lead you to buy a mortgage in the most straightforward steps.  That being said, and without waiting for your next minutes, we will be head towards the central part of the discussion.

Avoid Paying Setup Charges

The most concerning aspect when it comes to buying a mortgage is that investors want to save their initial payment charges. You would be surprised to know that according to a new law that was published in June 2019, buyers are in a much better position than before. Following change that has been brought under the action, banks and legal authorities are the one in charge of paying all the payments. Contrary, in the past, it was the buyer who used to pay all the taxes and charges. Below mentioned are the only two payments that are now needed to be paid by the buyer or the investor.

  • The valuation fees that are proposed by the property board of the country. This is the amount that banks need to release to make the real value of your property. That amount ranges from 350-500 Euros.
  • The next is the arrangement fees that vary from bank to bank. You will be charged almost 1-1.5% of the total cost of your property.

Low-Interest Rates

When it comes to buying a house or property, everyone looks for paying less on interest rates. If you are one looking to purchase a property in Spain, then indeed you can facilitate yourself from this feature. You must be thinking that banks are charging less than usual and it must be some other source from where they are deducting charges. To let your concerns at ease, you would be delighted to know that there is not any scenario at all.  The interest rates in Spain are comparatively very low as in other countries. Due to new laws, banks are only allowed to land a load on not more than 60 – 70 per cent of the property.  We will enlighten you about this in detail a bit later.

Repayments With Your Countries Currency

Not to surprise for many, but if you are resident of European country then certainly the following fact will amaze you to the depth. When you buy the mortgage in Spain, you don’t need to pay the rest of your amount in Euros; instead, you can choose you’re the currency of your own county to clear out your dues. You are allowed to make the decision when you are signing for the mortgage. Once the papers are signed and completed legally, you are then allowed to pay the reaming amount as per the agreement.

Types Of Mortgages In Spain

This could be the most awaited answer you were looking for. Having a clear insight into the types of mortgage in incredibly necessary to make the right choice for you. You can undoubtedly worsen up the things for yourself by not making the right choice. Therefore, below mentioned are the types that will help you in having a clear understanding of your position.

  • Variable
  • Fixed
  • Mixed

Before preceding, it is highly essential for you to know that but-to-let and interest-only mortgage are not available in the Spanish territory. Although the laws are the same for a resident or a non-resident, due to some uncertainties sudden changes are made in the law.

Differences Between Residents & Non-Residents

If you are not a non-residing non-EU citizen then for sure you need to have a clear understand points above.  These wells help you in knowing the exact starting point from where you can begin. However, if you are residing in Spain and have a valid passport then also you must need to stick around to have a better insight into the topic.

  • If you are non-resident, then you have to more amount then the usual. The interest rate for both parties is deliberately set different.
  • Moreover, for non-resident, due to having less acuity of the investor’s background, the amount to be landed is kept low. Residents are paid as high as 70-80 % of the mortgage, whereas non-residents are pain only 60 %.
  • When it comes to repayments, non-residents are given an approximate period of 20 years. In contrast to that, residents of Spain enjoy 40 years. It could also be expended under certain circumstances.
  • To decrease risk up to more extant, banks are only allowed to concede a fixed type mortgage to the ones who are not residing in Europe.
  • Taxations and other payments will vary accordingly in case if you are living or not living there. For those residing in Spain will be allowed for less than 183 days per.
  • Some of the mortgages can be less feasible for the non-residing party. Therefore, you must always have a clear look into the policies associated with a mortgage you buying.

Steps To Getting Mortgage As A Foreigner

Let’s now discuss each of the 6 steps that you must need to know to get a mortgage in Spain as an expat:

Prepare & Present The Required Papers

You will need to submit a list of documents that recognize yourself, help the bank know your assets and liabilities, and charges you pay.

Acquire A Mortgage Pre-Offer

After the bank examines the documentation and your appropriate situation, they will give you an offer. Ordinarily, that will simply be their initial offer, not the most immeasurable one you can get.

Prepare A Bank Account

Soon that you know of how much cash you will need to have to buy the property, you need to begin a bank account in Spain. That is where the compensation money will be retired every particular month.

Examine & Accept The Proposal

You will have a chance to compare that initial offer with other banks, seeking to get the best potential deal. Our recommendation is to bring the first offer to other banks so they can coordinate with it.

Agree With The Proposal

After identifying all of your claims, it is time to make the right selection. Be careful and choose the best feasible alternative. Endure in mind that you will have to be giving that loan back for apparently over 20 years. So perceiving your time to acquire is essential.

Mortgage Fulfillment

You will need to go to the office to conclude the process. There’s also the probability to facilitate power of attorney to a solicitor, so you don’t demand to be present that day.

Extra Step

Before preparing the mortgage, banks usually need you to contract protection against fire and other hazards for the capital. Even though life insurance won’t be required here, property protection will.

General Mortgage Conditions For Expats

After understanding all the critical aspects of getting a mortgage, you must also have a keen knowledge of some specific conditions. In the following section, you will be acknowledged about the necessary information required when requesting a mortgage.

How Much Can You Borrow For Your Spanish Mortgage?

This could be regarded as a thumb rule for all the cities and states of Spain. Only 60 to 70 percent could be allowed to foreigners under some special conditions. However, for the residents, the mortgage could be allowed up to 80 percent. But if you are living in Spain for more than two years and you have proof that you can then ask for more loans. You must also know that if you are buying a proposed property form a bank, then there are high chances of getting 100 per cent mortgage for that particular property.

Required Documents To Get A Mortgage

  • Before proceeding with any legal documentation, you must be having a legitimate passport.
  • NIE number that is the primary identification number. If you don’t have it now, this must be the very first thing to apply for. You are only legal to buy property in Spain if you have a legitimate NIE number. You can learn how to get a legalized number by having a review of the procedures mentioned by experts.
  • You must also be having an employment certificate with you. It is required as evidence that you are earning a handsome amount of income. This is necessary as an assurance that you can quickly pay back the mortgage installments.
  • Prenuptial or marriage agreement if applicable.

Conclusion

We hope that the information mentioned above will help you contemplate matter more feasibly. Buying a property isn’t that difficult as it seems, all you need to have is a clear understanding of the legal procedures to begin your documentations. Things can be made more accessible by following proper procedures and rules. That is what we have tried to do, by providing you step by step answer to most of the criticalities that are associated with these procedures.

Author Bio

Amanda Jerelyn currently works as News Editor at Crowd Writer. She is also an expert trainer at Dissertation Assistance, a renowned firm provides HND assignments help to university and college students at affordable prices. Being an active member, she likes sharing her diversified knowledge among her readers and audience.

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