Frequently Asked Questions in regards your mortgage in Spain.
What are the mortgage types in Spain?
Spain traditionally uses the French amortization method. This means monthly interest + capital is paid and the mortgage will be completely paid off during the term of the loan. You only pay interest on the outstanding mortgage amount.
How long does it take to obtain a mortgage?
The turnaround time from the moment of application up to the passing of the deed at the notary is about 6 to 8 weeks.
What is the maximun maturity of a mortgage?
The maximum maturity of a mortgage is 25 years, with a maximum age of 75 years.
How much can I borrow?
The maximum mortgage for non-residents in Spain is approximately 70% of the value of the purchase price or the value of the survey (excluding exceptions). The remaining part of the purchase price plus the costs of purchase will be financed by yourself. This generally means approximately 40% of the purchase price will be paid with own funds.
What is the income criteria of the banks?
Up to 35% of the monthly net disposable income can be spent on the monthly mortgage amount. Simply said, if you multiply your monthly expences by three, this is approximately the net income you have to be able to provide.
Can I finance 100%?
This is uncommon in Spain. On the other hand there are exceptions when you buy a property through the bank.
What are the annual expenses of a property in Spain?
Service charge of the Comunidad de Propietarios (community fee, this varies per urbanisation).
Real estate Tax (Impuesto Bienes Inmuebles, IBI). Approximate 0.4 to 1.1% of the cadastral value.
Municipal charges such as the retrieval of garbage (Basura).
Electricity, water, gas, Internet, telephone, security, etc.
Is a life insurance compulsory?
A life insurance policy is not compulsary by law, but can be a mandatory additional condition by the bank to provide the loan. This varies by bank.
Is a home insurance compulsory?
The property insurance must always be insured separately, with the bank as a beneficiary on the policy. Even when you purchase or own an appartment which is insured through the Community of Owners, you will need to take out a separate insurance for the property.
What are the advantages of a Spanish mortgage?
One of the advantages of financing the Spanish property is to lower the Spanish inheritance tax . The tax exemptions in Spain are very low and the tariffs can be high. If you want to know more about this we are more than willing so recommend a tax lawyer.
Should an appraisal always be carried out?
A valuation report is always requested by the mortgage issuing bank. The costs for this are on average 400 euro, or a percentage of the value of the property.
What is a NIE number and how do I request it?
NIE stands for Numero de identification de Extranjeros. For all non-Spaniards (both residents and non-residents) it is in many cases an indispensable document. Think of opening a bank account, a telephone contract, contracting an insurance, energy contract, the water company, buying a property, a car, etc.
What is a NOTA SIMPLE?
A Nota Simple is an official certificate of the Land Registry of Spain (Registro de la Propiedad). This contains information regarding the legal status of the property and the ownership. It is a very important document when transferring real estate into your name in Spain.