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5 IMPORTANT REQUIREMENTS YOU NEED TO KNOW ABOUT THE SPANISH MORTGAGE APPLICATION PROCESS
In Northern European countries, we usually consult the bank or a financial advisor first before going house hunting. It is noticeable that for the purchase of a second home, this often only happens after people have already signed a purchase agreement. It is better and safer to do this in advance. Then you have a good and complete picture of what is possible or not; whether there is margin to spend a little more for your absolute dream property or not, or because the potential rental income could be higher, etc.
With a good understanding of your financial possibilities, you can search and buy more efficiently.
One of the advantages of a mortgage is that you retain your funds. Additionally, you can take advantage of favorable interest conditions and, depending on your personal situation, it can even offer tax benefits.
When you decide to finance your purchase, it is advisable to conduct (or have conducted) a feasibility test. This way, you know exactly what the financial possibilities and expected monthly costs will be. Then, we can search together for what best fits your wishes and profile.
Below we briefly describe the general conditions for financing in Spain and the mortgage application process.
1. The maximum term
The maximum term of a Spanish mortgage for non-residents is 25 years, with a maximum age of 75 years.
2. The maximum financing percentage
The maximum financing percentage is 70% of the purchase price, or the appraisal value, whichever is the lower value.
3. The mortgage type
In Spain, it is common to provide an annuity mortgage. Interest and repayment are paid monthly. You only pay interest on the remaining outstanding mortgage amount.
4. Interest rates
You can choose between a variable and a fixed mortgage rate. The variable rate is calculated based on the Euribor (or Euro Interbank Offered Rate: the average interest rates at which a large number of European banks lend to each other) and a margin rate. These are reset annually. With the fixed mortgage rate, your interest rate remains the same throughout the term of your loan.
The variable rate is usually lower than the fixed rate. Both options have advantages and, depending on your profile, we can determine which option is the most interesting.
5. Processing time
The processing time from a mortgage application to the transfer is on average 7 to 9 weeks.
Since there are many mortgage providers in the Spanish market, we recommend enlisting a Dutch-speaking mortgage advisor. This helps you simplify the application process, speed it up, and avoid pitfalls.
We would be happy to put you in touch with our financial specialist. They are 100% independent, provide all services in Dutch, and have direct access to multiple mortgage providers in the Spanish market.
From the first contact with the bank to the signing of the deed at the notary, they assist you. Even after arranging your mortgage, you can always contact them with any questions.
Tip: Hiring a mortgage advisor provides you with benefits:
- Direct access to multiple mortgage providers through one contact person
- Service in your own language
- Independent advice and the best conditions
If you want more information about financing Spanish real estate, or want to conduct a free feasibility test, do not hesitate to contact us.
READ HERE THE DETAILED CHECKLIST FOR A SPANISH MORTGAGE!
