How to get a mortgage in Spain?
After the economic crisis, the Spanish credit landscape has changed. The Spanish real estate market is recovering quickly after years of uncertainty. How to get a mortgage in Spain? It is a very common question among many people who want to take advantage of this good economic moment in Spain and want to acquire a property
What to keep in mind to get a mortgage in Spain
The interest applied to mortgages in Spain is calculated in relation to the base rate established by the European Central Bank. In Spain, banks can establish different charges and terms, although they have their limits. Therefore, it is very important to compare what each bank or saving bank offers and choose the best mortgage.
Although fixed-rate mortgages are growing, many mortgages sold in Spain (for Spaniards and foreigners) have a variable rate. With this, the monthly mortgage payments vary according to the base rates established by the European Central Bank.
Some banks offer mortgages at a fixed rate, which leads to paying a higher interest in less time, although if interest rates increase, a person with a fixed-rate mortgage may pay less than one with a variable rate. There are also mixed mortgages, formed with a fixed interest payment period and a variable rate for the rest of the amortization time.
All the banks carry out a credit study to the client because it is necessary for the bank to know the income it has and its banking history. If the income is fixed or prospects are good prospects for revenue to continue or increase, it is possible to find much more favorable mortgage conditions.
It also depends on the type of property to be acquired and the amortization time of the mortgage. In addition, there are entities that finance up to 80% of the appraisal of housing, being one of the reasons why it can be very interesting to find a professional in Spain who knows the Spanish real estate market and allows the client to obtain important opportunities at the time to acquire a property.
Get a mortgage in Spain as a foreigner
If a foreigner has a residence in Spain, it is something that will positively influence the conditions of the mortgage in question. If you are a resident, the mortgages that can be requested are of an ordinary nature, while the non-residents have much more demanding conditions.
One of the most common ways for a foreigner to hire a mortgage in Spain is usually through the Internet, although it can also be done in the physical offices. Regarding the term to amortize the mortgage, if we speak of non-residents, the maximum term is 20 years and 30 if they are residents despite being foreigners.
The usual maximum financing can reach up to 80% of the purchase price or value of the appraisal and up to 60% in case it is a second home.
In terms of interest rates, those applied to non-residents tend to be higher since they are usually used for a second home. The mortgages that are granted are usually at a fixed rate, something that is much more common abroad than at a variable rate, as is also offered in Spain.
In order for a foreigner to apply for a mortgage, he must have a photocopy of the NIE or passport, work contract or pensioner certificate, a certificate proving that he is not a resident of Spain, a tax return, a certificate of tax residence, the latest payrolls obtained in the country of residence as well as the bank statement of the last year where the payroll is entered, the last three outstanding debt receipts that have been canceled and the contract of the property to be acquired.
Is it easy to get a mortgage in Spain?
Different Spanish banking entities have been surveyed from the Bank of Spain and in this third quarter of the year it is foreseen that the criteria for granting mortgage loans have been slightly relaxed in all modalities.
This has meant that the demand for mortgage credit has been growing in a generalized manner, something that will continue to be done when we find you in the next year 2019.
Regarding the retail and wholesale financing markets, the perspectives that banking entities have for this third quarter point to an improvement in access conditions in the fixed income securities markets, as well as in the securitization and securitization markets. in the capacity to transfer off-balance risk as well as stability in the rest of the markets.
It is very important to remember that this relaxation in terms of consumer credit adds to that detected in mortgage financing. Currently, some banks are returning to grant loans for the total value of housing instead of a maximum of 80% as they have been doing so far.
This means that more and more people are encouraged to apply for a mortgage for the acquisition of a property, so it can be said that the situation is more favorable now than at the beginning of the year.
Things may be much easier today when it comes to getting a mortgage to acquire a property, but it is advisable not to assume any kind of risk and have the advice of a professional so that everything goes as expected.