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Getting a Mortgage in Spain

[vc_row][vc_column][vc_column_text]Now is a great time to buy a property and get a mortgage in Spain. The economy’s booming and house prices are rising, interest rates are low and it’s a great country to live in too.

Here’s our guide on getting a mortgage and the legal considerations of this move.

Firstly, you need to consider mortgage rates:

In Spain you will find two main types of mortgage rate, which are similar to the options in many other countries:

  • Fixed rate mortgage: the interest rate is fixed at the start of the mortgage. The periodic amount and interest will not change during the term of the mortgage.
  • Variable interest mortgage: The interest rate on your mortgage will be adjusted up or down according to current interest rate levels. The periodic amount and interest payment will go up or down with these rate changes depending on the index set chosen (such as MIBOR).
  • The initial interest will be initially low. The banks normally use this tool to make the mortgage offer more attractive. But later on, this interest may convert into an excessively high interest so be careful.

What are the main steps in the mortgage process?

The process normally requires proof of your income along with your monthly expenses. Then the mortgage repayment term needs to be calculated.

The Spanish mortgage process is as follows:

  • Mortgages must be formalized in a public deed of a mortgage before a Public Notary.
  • The property must be registered at the Property Registry with the name of the owners whom the mortgage is given to.
  • The mortgage shall also be registered at the Property Registry, as evidence that it is a preferential charge in the property. A non-registered mortgage is an ordinary loan and therefore does not constitute a preferential charge on the property.

In the last few years, we have witnessed reductions in the interest rates offered in the Spanish market so it is an attractive time to secure a mortgage.

Many people also found that their mortgages rates were too high, and decided to modify the terms, either negotiating lower rates with the banks or changing the lending bank.

What expenses are involved in the property purchase?

If you intend to get a mortgage, here are some of the costs that you should factor in:

  • Valuation of the property.
  • Request of extract (Nota Simple) issued by the Spanish Property Registry, which shows the latest recorded details of any charges on the property.
  • Bank mortgage opening fee: this is paid when signing the deed. This fee varies depending on the lending bank you deal with. Theoretically, this commission serves to cover the costs the bank has incurred for studying the terms of the loan to the borrower. Some banks do not collect this fee.
  • Stamp duty (Impuesto de Actos Jurí­dicos Documentados). Between 0.5%-1,5% of the property price, depending on the amount and the location: It must be paid when a notarial document is signed.
  • Notary and Registry: These fees vary depending on the guaranteed capital of the mortgage.
  • Insurance: The banks normally require the borrower to take a home insurance plan as part of the mortgage terms.

It is important to analyze the terms and the financing conditions offered in the binding offer and the terms, with your Spanish lawyers.

How can Lecuidy help me get a mortgage in Spain?

We work with the top banks in Spain, and would be pleased to introduce you to them to offer you the best conditions depending on your circumstances. Get in touch today – or just use the live chat to ask us a question right now![/vc_column_text][vc_raw_html]JTNDc2NyaXB0JTIwY2hhcnNldCUzRCUyMnV0Zi04JTIyJTIwdHlwZSUzRCUyMnRleHQlMkZqYXZhc2NyaXB0JTIyJTIwc3JjJTNEJTIyJTJGJTJGanMuaHNmb3Jtcy5uZXQlMkZmb3JtcyUyRnNoZWxsLmpzJTIyJTNFJTNDJTJGc2NyaXB0JTNFJTBBJTNDc2NyaXB0JTNFJTBBJTIwJTIwaGJzcHQuZm9ybXMuY3JlYXRlJTI4JTdCJTBBJTA5cG9ydGFsSWQlM0ElMjAlMjI0NDk4MzUwJTIyJTJDJTBBJTA5Zm9ybUlkJTNBJTIwJTIyMGVlMDNkMDQtOTE0NC00ODA5LWJlYTEtZDg3ZmQxMjA2ZjM3JTIyJTBBJTdEJTI5JTNCJTBBJTNDJTJGc2NyaXB0JTNF[/vc_raw_html][/vc_column][/vc_row]

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