Getting a mortgage in Spain
The vast majority of non Spanish citzens who decide to buy a property in Spain, intend on getting a mortgage loan. With regards to this there are questions constantly being raised about what it entails now and in the future.
Today, a loan that is secured by person that already owns a property in Spain is one of the most attractive loan options in Europe. The process of getting a mortgage is no different for non Spanish citizen then it is for a Spanish Citizen. However, it would be a mistake to assume that anyone who applies for a mortgage will be approved. The decision is influenced by factors such as; following the correct procedures, submitting and filing specific documents correctly and ultimately a decision being reached by the bank etc.
You can obtain a loan on your first home and a second home. Once you have found a property, the next stage is choosing which bank to use. As a rule, the Marbella Project submits documents to multiple banks on your behalf.
Bank selection / current rate
The conditions provided by most banks tend to be fairly similar, however the timescale in which they take to review your mortgage request may vary drastically and this is what makes all the difference to a customer.
The current rate is 2.5-3% per annum for 20 years. The loan is calculated based on the appraised value of the property and the purchase price specified in the contract of purchase and sale (negotiable upon purchase).
The evaluation is conducted by an independent appraisal company. Usually this process takes about 5-7 business days and does not require the participation of the buyer.
Package of documents
The list of required documents provided by a Bank. In most cases it is usually the same documents.
Marbella Project will provide you with all the information you require regarding what documents you’ll need from Russia before coming to Spain and we will arrange a meeting at the Bank, accompanied by one of our staff members
The main proof of the solvency of the buyer are:
1. Documents from various credit institutions (bank account statements, information about your credit history).
2. Copy of your tax return, as proof of your income.
It would be beneficial to provide any documents proving ownership of any property or other assets.
Please note that all documents provided from your citizen country must be translated into Spanish or English by an accredited translator. It will take time and you have to pay for the service. Documents in English will not require translation in most cases.
Terms of contract signing
Once all the necessary documents have been submitted correctly, the bank will take approximately 7 to 14 days to consider your application.
The time scale for loan processing (from the time of the decision before signing the contract) depends on how quickly the borrower provides all the necessary documents. Once we receive all the documents required Marbella Project aim to have them processed in 2-3 weeks.
To open an account you will need to get a tax identification number (NIE) from your local police station. This process is fairly quick and easy.
The signing of the loan agreement with the Bank takes place at the time as the transaction of purchase and sale.
The Revision of Conditions
When signing the mortgage contract it is advisable to add in a clause allowing you to engage in dialogue with the Bank on any renegotiations.
Your choice in lawyer and their cooperation is vital when it comes to communication with your bank.
Marbella Project will always only recommend professional, well-established lawyers, whith whom we’ve dealth with for a number of years.
It’s important to understand that processing a loan involves additional costs, including:
- annual insurance of property and life insurance of the borrowers
- payment of real estate appraisal
- payment for translation of documents into Spanish or English
- a one-time payment for loans
- payment of further use of the account
The majority of banks offers mortgage customers private insurance packages and preferential terms for conducting financial transactions.
Monthly loan payments are made from a personal bank account. Its completion is entirely the responsibility of the owner and is not in any legal manner.
Early repayment of the mortgage
If you wish to terminate your mortgage contract and pay off the debt, you will be required to pay approximately 0.5% of the outstanding loan amount. The procedure takes several days from the filing of the application.
When property is acquired on credit, it is possible to sell the property or rent it out. When selling the property it is a prerequisite of the agreement that you are liable to pay off the credit debt
Free organization mortgage loan under the key
For their clients Marbella Project organizes a mortgage loan under the key for free. In the absence of free time You do not have to be in Spain in preparation for the transaction. A fundamental factor of the loan is the correct registration of necessary documents and their timely submission.