Spanish Mortgage Guide

Naturally enough, because Spain is such a popular destination with international investors and second or retirement home buyers, there is an incredibly active Spanish mortgage market.  There are over 200 local banks willing to lend to overseas buyers and there are many institutions in and from the likes of Germany and the UK, from where the majority of buyers in Spain herald, who offer a range of home finance and mortgage deals to their citizens as well.

As there is so much choice in terms of finance product and professional lender this is the ShelterOffshore Spanish mortgage guide to show you what’s on offer and to help you find the right mortgage to buy your home in Spain.

Depending on whether you’re buying property in Spain to live in, to holiday in or as an investment, and whether you’re buying an older property, an off plan property or a completed new build or you’re interested in re-mortgaging a home you already own in Spain, your mortgage product options will differ as will the amount you can borrow as well as which lenders can assist you!

So, having highlighted just how much confusion you may encounter, let us unravel the facts for you…

According to Spanish laws which govern lenders operating in Spain the maximum allowable Loan to Value is 70% of the valuation of the property that you’re interested in buying or refinancing but never more than 100% of the purchase price.  Furthermore, most lenders will not consider lending more than 3 times income, Barclays Bank is one of the few international lenders who will occasionally look at four times income. 

All lenders favour those in stable employment or with at least a long proven track record if self-employed, and the lower the percentage proportion of a property’s price the applicant is seeking funding for the more likely it is that their application will be accepted…i.e., the lower the risk to the lender the higher the chance of getting the loan agreed.

Those who are aware that for one reason or another they may struggle to get finance might like to consider the option of either re-mortgaging their current primary residence and using the funds to buy in Spain, or employing a local mortgage broker in Spain who can hunt out lenders specialising in difficult to get secure deals.

Before banking on buying a home in the sun it is always wise to get some of the financial groundwork covered.  By speaking to at least one lender about what’s available and about what your chances are of securing a mortgage an individual will be better armed with the facts about how much they can afford to offer for their ideal Spanish property. 

We recommend that as a first point of contact our readers consider speaking to the likes of Barclays Bank which is an industry respected institution with over thirty years experience in the Spanish market and which has a very broad range of product available.  The bank has a strong presence across Spain and if you click here and complete their contact form, an English speaking Spanish mortgage expert will contact you and discuss your options with you.

Once a potential buyer knows what sort and amount of mortgage they will likely be able to raise and they are aware of the repayments and arrangement fees they can then firm up their budget and enter the marketplace in a far more confident position.

The stage in the property buying process at which any mortgage needs to be in place comes before the signing of final contracts…basically, once a formal offer has been accepted it is up to the buyer to begin finance application proceedings immediately so that the application for a mortgage does not slow down the purchase process.

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