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Obtaining a Mortgage for your Almeria Property
SPANISH PROPERTY CHOICE - WE ONLY WORK WITH THE BEST SERVICE PROVIDERS
Typically here in Spain non-residents can secure a mortgage of 60-70% and residents up to 80% on resale properties.
After many years of working alongside some of the more reputable banks and gaining a professional reputation within the local banking industry, Steve, Emma and Shaun can advise you on which bank best services your requirements.
The banks are professionals in finance and are more suited to handle financial matters rather than real estate.
WE OFFER A WIDE RANGE OF BANK SERVICES
We have experienced clear signs of recovery in the market, so this could be a timely opportunity for any potential investment.
Contact us today for all your financial requirements and talk to one of our trained professionals or we will introduce you directly to our corporate banking partners.
Allow Spanish Property Choice to help you make the right choice.
Spanish Property Choice Mortgage Information
If you are considering financing your property purchase with borrowing, you will need to get professional advice as early in the buying process as possible. Spanish Property Choice will provide you with a selection of mortgage options to suite each individual purchasers requirements.
The following pages we hope will be of assistance to you and provide you with some basic generic information. As with any financial advice, it is important to talk through your needs with one of our trained industry specialists. We are here to help... Email: [email protected] or [email protected] or [email protected]
Funding your property purchase with a mortgage! We would always recommend that you know exactly how much you can afford to spend. For anyone who watches Sun, Sea and Selling Houses, will know that when our house hunters give us a budget to work with, we very rarely go over that budget. It’s no good us trying to sell the dream if that dream becomes a nightmare when our clients cannot afford to enjoy it. So our advice always is make sure your finances are in place before you visit or view properties. 1) because you will then know exactly what budget to work with and 2) When applying for a mortgage, sometimes the process is not as quick as you would like and with a very fast moving market, properties are not hanging around.
Getting a Spanish mortgage
Arranging any mortgage abroad can be a daunting prospect and sometimes it’s difficult to know where to start, however The Garners have your best interests at heart and have worked now for over 18 years with the best service providers in the Andalusia region. So we will make sure you speak to the best banks to achieve the best deals.
Mortgages for a Non-resident
If you are non-resident who pays your taxes outside Spain, Spanish banks will review a maximum mortgage amount of 60 to 70% of the purchase price. Please note if the bank valuation is lower than the purchaser price, they will only offer up to 70% of that valuation. If you are a fiscal resident and you pay Spanish taxes, the maximum mortgage is up to 80% currently (Please note these figures can change at any time and much be confirmed prior to your application)
Mortgages for people who are retired - If you are over the age 60 and receive a pension, you are still entitled to apply for a mortgage in your own name. If you have next of kin or close family members, it is possible to appoint any of them as a guarantor to secure the borrowing, which is a benefit when it comes to inheritance tax and if they are also a part-owner in the property.
Building your dream hone Mortgage– If you are looking to build your dream home, some banks offer a construction mortgage. They can differ but broadly-speaking there is a possibility of borrowing between 60-70% of the land and construction costs combined.
Mortgage Conditions
Interest rates
Most banks use the annual Euribor as the base rate but they then add their own fee to this, e.g. “Euribor plus 2%”.
They may require that you take the chosen banks life and home insurance, so make sure you ask about this before signing anything.
Most of the majority of mortgages are variable rate here in Spain, however fixed rates are becoming more popular, especially now that the Euribor is at its lowest ever level.
An average fixed rate mortgage for say a 20-year term, could be 2.99%, depending on which bank you choose. Interst only mortgages are normally only offered for construction mortgages here in Spain and normally over 1 or 2 years at the start of the term.
Term of mortgage – most are over 25 years (for non-residents), 30 years (for residents) and usually up to a maximum age of 75. For non-residents, many banks have a maximum 20-year term.
What is the criteria for Qualifying?
Lenders all use a debt-to-income calculation as the basis for deciding whether you will qualify for a mortgage. Basically, this means that your monthly debt commitments, including the new mortgage, must not exceed a given percentage of your net monthly income and a typical % is between 30/35%..
If you are looking to obtain a mortgage and you would like to speak with one of our professionals who deal with this daily, just email [email protected] with your contact details and he will guide you all the way.
Remortgage
A remortgage is the process of paying off one mortgage with the proceeds from a new mortgage using the same property as security this can be within Spain or within the UK, other EU countries may vary. Remortgaging your current home in the UK can potentially free finance to go towards an overseas property.
Interest only mortgages
A mortgage in which the monthly repayments cover only the interest accrued on the outstanding loan amount over a specified term. This form of mortgage is still available here in Costa Almería and we are always happy to guide you to the best financial house offering the best offers available to you at the time.
Spanish Property Choice can assist you in finding the best financial service providers to aid your overseas property purchase and can access the best deals for you.
When should you get advice?
NOW at the starting point of the buying process.
If you arrange the finance first then you’ll know:
- What budget to set yourself.
- That you actually qualify for a mortgage.
- That you can safely put in a formal offer when you find your dream home.
How will lenders calculate what you can borrow?
The lenders calculate what you can borrow based upon affordability. Each Spanish lender has its own set of terms and conditions however in general, they all work to similar guidelines.
These guidelines balance, in the main, on two questions:
- Can you prove your income?
- What is your debt to income ratio (DTI)?
You must be able to prove your income or the mortgage will be declined. Proof of income if employed will be required via payslips and end of year tax figures and if you are self-employed you will need to provide at least two years accounts.
Most of the banks work on debt to income ratio. This is effectively, the percentage of income, which is used to service debt.
So always ask your self first “How do I propose to finance my overseas property purchase?” before you sign anything.
Armed with this little bit of information you already have an idea as to how an overseas bank will view you and how successful your mortgage application is likely to be here in Spain.
How do Spanish mortgages work?
Spanish mortgage lenders usually base their lending decisions upon what they call a debt to income ratio. Proof of all of your income will be required either by way of your pay slips if you are employed or your accounts if you are self-employed.
Spanish lenders will have a maximum percentage that they will lend against a property value, this varies from lender to lender. Talk to us for an up to date %.
You will need a Spanish solicitor to carry out the conveyancing on your behalf and they must be independent.
What paperwork do I need to submit an application for finance?
You will be required to provide a number of documents. They do not generally offer non-status loans or loans based on limited information. The general list below covers the some of the information they will require.
- Passport.
- Proof of your current address.
- Your last 6 months bank statements.
- Your last 3 months pay slips.
- Your last P-60.
- Your last two years accounts if self employed.
- Your proof of current mortgage or rent payments.
Why use a mortgage instead of selling my house in my current county of residence?
If your house does not sell quickly ask yourself just how long are you prepared to put your life on hold? Have you considered the benefits of letting your current residence property? A short term mortgage may allow you to proceed with your purchase here in Spain, while other matters are being resolved.
I don’t own a property in the UK or an other EU country, can I get a Spanish mortgage?
Yes you can get an overseas mortgage providing you have a sufficient deposit.
I am self-employed is it possible for me to get a Spanish mortgage?
Yes providing you can provide business accounts and or recent tax returns.
I am currently on a pension, can I get a Spanish mortgage?
Yes as you are retired and receiving a pension you cannot be made unemployed and your income is not reliant on whether you are healthy enough to work or not. However you need to be aware that in Spain they do have an upper age limit on their mortgages normally they will give you a mortgage up until the age of 75 years "young"! However Spanish Property Choice always advise you think hard and long about this option. Ask yourself do you really want a mortgage at retirement age?
Surely if I go straight to a bank it would be better and cheaper for me?
Spanish banks all have different criterias. Spanish Property Choice know what these are and can choose the correct lender for your circumstances. We are also fluent in Spanish and will help you through the process from start to finish to enable you to achieve the best deal for you when purchasing a property in Almería.
If I have had a credit problem in the past. Can I get a Spanish mortgage?
It will depend upon your individual circumstances. However the Spanish banks do generally like to see a clean credit history.
How quickly can I arrange the finance?
Our professional team of staff at Spanish Property Choice will discuss your requirements over the phone or when we have the pleasure of meeting you on your visit to the area and will then complete a fact find which will determine whether you qualify. If you do, we will then confirm what deals are available for you, this service we offer free of charge! Once you are happy with your chosen bank and offer then we can help you submit your application and get a decision from the bank. Typically it will take around 3-5 weeks from your initial application to when you receive your mortgage offer.
What will it cost me?
Spanish Property Choice do not charge you anything to help you achieve the finances to aid the purchase of your dream villa in Almeria, we are here to help!
What should I do next?
Contact Spanish Property Choice NOW on 0034 950 615 388 or email [email protected] One of our trained members of staff will call you straight back or email you with the information you need to move forward.