Mortgages In Spain
Availability:
Hamiltons property have a dedicated mortgage desk that can assist with
your mortgage requirements. Mortgages on Spanish properties are available,
up to 70% of the value.
Main lenders:
Most Spanish banks (Sol Bank, Deutsche bank, BBV and Bank of Atlantico)
and Building Societies (Halifax, Norwich & Peterborough, and Abbey
National) will offer mortgages for properties purchased on the Coast.
Properties bought off plan can also be mortgaged, on completion
Mortgage costs:
Depending on which lender has been selected to provide your mortgage:
- The arrangement fee will be between 1% and 1.5% of the loan.
- The valuation fee will be approximately Euros 500 depending on the
property value.
- There are also the notary costs, taxes, property registration and
legal fees of the lender.
- For easy calculations the above costs normally total up to between
8-9% this cost must be considered when purchasing property in Spain.
The maximum amount you can borrow will also depend on your income. In
general the rule of thumb is that you will be advanced up to 3 times your
gross annual income.
Currency of mortgage:
Mortgages are available in most major currencies. We strongly advise however,
that you set up your mortgage in EUROS. This safeguards your risk of exposure
to currency fluctuations. Interest rates:
Interest rates for mortgages in Euro are based on EURIBOR (Euro Inter
Bank Offered Rate). The EURIBOR rate at the time of writing (Jan 2003)
is 3.4%. The lenders will normally charge EURIBOR + 1.25% but individual
circumstances will determine the exact interest rate, which could be higher
or lower.
It is common to find that some lenders offer a lower "Start up"
interest rate of 3.75% for the first year then go up to EURIBOR + 1.25%
from year 2 onwards.
Maximum repayment term:
In general, the maximum repayment term is 15years, but up to 25 years
can be arranged. This will be dependent on the age of the borrower. The
eldest partner must not go beyond his 70th birthday by the end of the
term of the mortgage. This means that for a couple, where the eldest partner
is currently 55 years old, the maximum repayment term on offer would be
15 years.
Documents required:
The documentation required will vary from one lender to the next. As a
general guideline we have listed most of the paperwork you are likely
to need, it is a good idea to prepare much of these as soon as possible.
If you are employed you will need to produce:
- Last 3 wage /salary slips.
- Last income tax declaration (P60 in the UK) or evidence of latest
annual tax assessment (if you live in a tax-free environment then this
is not applicable).
- Copies of current bank statements (last 6 months).
- Bank reference letter.
- Letter from your employer confirming date of employment and proof
of income.
- Copy of passport / residence permit (residencia) if you are resident.
If you are self-employed you will need to produce:
- Latest income tax declaration (where applicable).
- Copies of the accounts for the last 2 / 3 years.
- Chartered Accountants Company report, confirming your annual personal
drawings from the company.
Transferring money to Spain:
Bank charges and commissions for transferring money from the account vary
considerably from bank to bank. We recommend that you consider a currency
company like HIFX who can obtain preferential rates.
Information provided courtesy of Andalucia Real Estate
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