Spanish Mortgages
By Ruth Polak
In the past it was generally assumed that people buying property in Spain had the cash to do so. However that has changed in recent years as many people are buying homes because they live and work permanently in Spain or because they see it as a good investment.
Spanish banks (bancos) and savings banks (caja de ahorras or caixa in Catalán) too have changed in recent years and are now much more amenable to giving Spanish mortgages to foreigners so it is certainly something to consider if you are intending to buy property in Spain.
One of the main advantages of a Spanish mortgage over a U.K. one, for instance, is that generally speaking the interest rates are quite a bit lower with different Spanish banks having different offers so it is certainly worth shopping around.
A good idea is to ask the bank for a copy of their Spanish mortgage offer then take this to a different bank and ask them if they can better it- they often will.
Then it is worth taken the improved Spanish mortgage offer back to the original bank and you may well get a pleasant surprise, Spanish banks seem to be much more flexible than their U.K. counterparts and the competition between them is fierce.
The other advantage of a Spanish mortgage is the fact that the banks and their bank managers are familiar with the process of property purchase in Spain and can therefore guide you through the procedure more simply and smoothly than perhaps a foreign bank can.
As with the U.K. to qualify for a Spanish mortgage you will of course have to be able to prove your income.
You will need to produce wage slips for the last 3 months and bank statements for the last 6. The self-employed will need audited accounts going back three years plus copies of 12 months business bank statements.
For those buying to let be warned, a Spanish bank will not give a mortgage based on projected income from rentals.
Spanish mortgages are generally 60-80% of the property value repaid over 5,10,15 or 20 years although some banks will offer 100%. The current variable rate for a Spanish mortgage is 4.7% which compares very favourably with what U.K. high street banks and building societies are currently offering. The repayments should not exceed 35% of your net monthly income.
The recent building boom in Spain has resulted in Spanish mortgages now being readily available and Spanish banks are keen to do business with foreigners.
Many of them, particularly in the more touristy areas, employ English and German speaking staff and I think if you are applying for a Spanish mortgage you will be pleasantly surprised at the reception you receiveand the helpfulness of the bank staff.
ABOUT THE AUTHOR
Ruth Polak is the owner of www.costadelsol-vacationrentals.com a site specializing in holiday apartments and villas on the Costa del Sol and in Rural Andalucia. You will also find lots of information about Spain and Andalaluciain particular. |
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