Moving to Spain and Getting a Mortgage

It’s all well and good for these rich retirees selling up and buying themselves a villa in the Spanish sunshine – but what about the rest of us who either want to retire before we’re too old to enjoy ourselves or who haven’t quite got the right amount in the pot to buy that ideal Spanish home just yet?  Is there a way to move to Spain and survive financially?

The answer is of course yes – there are many options available – move to Spain and rent a house, find work, start a business or consider moving to Spain and getting a mortgage to buy a place for example.  This mortgage can be funded by renting out your former principle residence back in the UK, USA or country you herald from or by you taking a part or full time job for example, or using interest from investments to pay off the mortgage…in this article we look at Spanish mortgages and options you have for affording to move to Spain sooner rather than later.

Despite what many people are saying, property prices in Spain are not going down and an increasing number of people just feel that if they leave it any longer they’ll never be able to afford to live out their dream of having a home in the Spanish sunshine.  Because of this very reason there’s been an increase in interest among our readers relating to Spanish mortgages, how they work, who’s eligible for them and how much you can potentially borrow…so here we have all the answers for you.

Many international banks as well as local lenders will lend on a wide range of Spanish property.  The only restrictions on what they’ll lend on tend to relate to what are classed as ‘rustic’ properties in agricultural areas or basically older properties in rural areas - so if in doubt always ask your preferred lender about what they won’t consider lending on before you fall in love with a falling down finca off the beaten track!

By the way, if you’re interested in mortgaging land to develop on it yourself or you want to buy a commercial property with a mortgage you’ll need a specialist lender – this article is only dealing with residential mortgages.

So, what can you borrow and what can you buy?  Well, if we take a look at the mortgages on offer from Barclays Bank who have a large local presence in Spain as well as strong international standing, they’ll lend money to you if you’re buying a new home, a holiday home, a permanent home, an off plan property in Spain, a buy to let investment, a renovation project, a self-build and they’ll even give you a re-mortgage.

As with all mortgage lenders Barclays will assess every single application on a case by case basis, but as a guideline you can borrow up to 70% of the loan to value (LTV) as long as that does not exceed 100% of the purchase price.  They’ll generally look at 3 times joint income but will occasionally go up to 4 times so long as they are not going to be giving more that 50% LTV and it’s really worthwhile noting that the lower the proportion of the property’s value that you want to borrow the more likely it is your application will be accepted - and that you’ll get the best interest rates and deals going.

Another point worth mentioning is that those who are going to be living in Spain and paying off their Spanish mortgage with income earned and who can show a stable income and job history will also be considered more favourable candidates for loan acceptance.  In fact, with a mortgage in Spain or anywhere else for that matter, the more you look like you don’t need the loan the more likely the bank is to give it to you!

If your heart is truly set on starting a new life in Spain then don’t hold back, don’t put off the dream until tomorrow because you think you can’t afford the ideal home or even any home!  Get your foot on the Spanish property ladder in the same way you’d consider getting on the property ladder in your current country of residence.

If you’re considering moving to Spain and getting a mortgage then your first step MUST be speaking to a mortgage lender to discuss your options.  Please don’t rush off and put a deposit down for your dream home or chuck in your job back home before you’ve taken this critical step.  You need to be armed with the facts about what you can and can’t afford by finding out what a lender will give you before you get on a flight and start hunting for your new home in the sun.  Speak to Barclays, click here to be redirected to their contact form, simply submit your details and tell them you’re interested in Spain as your next country of residence and they’ll call or email you back and go through all your options with you.

By taking the time to get informed in this way you’ll make sure your whole transition abroad is a smooth one.