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Guidance notes for purchasing a property in Spain |
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Page 1 of 2  If you're planning to buy a home of your own in Spain, International Mortgages have a local team of specialists, who can provide you with all the help and advice you will need.
We have years of experience in assisting people to purchase properties in the Iberian Peninsular - and we are in regular contact with surveyors and lawyers in most of the expatriate centres. So we are ideally placed to guide you through the whole process - and ensure that your purchase is completed as speedily and smoothly as possible.
However, don't wait until you've found a suitable property. Talk to us as soon as you can - ideally before you even start looking for a home. We can explain the whole procedure to you, warn you about some of the pitfalls, establish exactly how much you can borrow - and generally smooth the way to your new front door.
Includes Spanish Residential Property in Mainland Spain, Canaries & Balearics.
Loans available for the majority of Nationalities for either House Purchase or refinancing for Home
Improvements only.
| Type of loan |
Repayment, Endowment and ISA Mortgages |
| minimum |
£10,000 |
| maximum |
no maximum, but must not exceed 75% of valuation or purchase price (whichever is the lower). |
Proof
of income |
required in all cases (can be made up of earned income, pension, investment or rental income. Please note however, that it is not always the case that the lender will take all or part of these incomes into account when determining the maximum loan available).
Non-status loans are currently not available. |
| Term |
5 to 25 years up to age 70 |
| Currency |
All major currencies - including Euros. |
Current
interest rate |
from approx. 1.50% above LIBOR on a Variable Rate basis in Sterling, or 3.95% fixed for 6 months in Pasetas. |
Example:
Repayment mortgage of £50,000 over a period of 15 years at an interest rate of approx.
7.50% = £472.50 capital & interest per month = a total approximate amount payable over the term of £87,050 including capital, interest arrangement and survey fees.
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| How much can I borrow? |
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Your loan is based on your joint net "take home" pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans and any maintenance payments together with your proposed Spanish mortgage payments must not exceed 35% of your net monthly income.
Example:
Net joint monthly income £2,500 x 35% of that figure is £875 minus existing monthly mortgage payment £300 - no other liabilities. This leaves a balance of £575 for a proposed Spanish Mortgage payment.
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| Guidance notes for purchasing a property in Spain |
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Please ensure that you will have full title to the property on completion and that the "nota simple" is available for the lender this document may be required before a valuation can be carried out.
With new properties, find out the date the property will be registered in your name(s), as the lender cannot lend on the security of the property until it has been registered.
Whilst all reasonable steps will be taken to secure the loan on your overseas property as soon as possible, delays may occur due to the Spanish legal and administration system.
Check with the estate agent/vendor that you are aware of the costs charged by the legal & government authorities for purchasing a Spanish property, noting that the lender will have their own legal costs for assigning the loan (the cost of which they will normally advise when they issue the mortgage offer).
It is essential that you take the appropriate independent legal advice if purchasing a new property as would be expected if you were purchasing in the UK.
The completion of a Spanish mortgage takes place in front of an appointed Spanish notary and all parties to the mortgage, including the vendor, lawyers and a representative of the lender need to be present. However a power of attorney may be used to sign on your behalf for the mortgage and deeds. A copy of this power of attorney will need to be presented to the lender in good time before completion.
A Spanish bank account will be required and some lenders offer this as part of their service, but not all.
It is advisable to arrange your mortgage finance before agreeing to purchase a property. You should never sign anything or make a deposit without ensuring your deposit is refundable and you have taken independent advice.
All Spanish mortgages are "full status" and proof of income for a minimum of two years is required. Some lender's carry out UK credit checks but not all.
Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. Be sure you can afford the repayments before entering into any credit agreement.
The local currency equivalent of your liability under a foreign currency mortgage may be increased be exchange rate movements.
All figures believed correct at time of issue.
This is not an offer of mortgage
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