Mortgage in Spain
When buying a property, it is not always possible to pay immediately, therefore, mortgage lending is often used in transactions. Another important plus of mortgage lending is the ability to significantly increase the area of purchased housing. Mortgage loan is more profitable and more convenient to get in the country where housing is purchased. In Spain, citizens and foreigners can apply for a loan.
After an application for a mortgage loan has been filed, the bank assesses the purchased object and, on the basis of this assessment, allocates funds for its acquisition. Residents of Spain or countries of the European Union can receive a loan of 70 – 80%, and non-residents – from 50 to 70% of the assessed value of the acquired property or the price indicated in the escrita (escritura de compraventa), or bill of sale. The amount of the loan is calculated by the bank, based on the lowest value.
Mortgage loans are usually issued for a period of 5 to 30 years. For those who are not residents of Spain and EU countries, the term of mortgage lending, as a rule, is limited to 25 years and depends on the age of requesting a loan. If there are several applicants, the age of the youngest of them is taken into account.
Spanish banks offer foreigners who buy real estate in Spain on credit, favorable financing conditions. Loan interest rates can be fixed, floating and mixed.
Fixed rates are suitable for those seeking greater stability. The main disadvantage of such rates is that they exceed the floating ones.
Floating rates are the most profitable and popular, but there is a risk that in the future the rate may increase. Floating rates are calculated based on the values of the European Interbank Offered Rate Euribor and may change every six or 12 months.
With mixed rates, a fixed percentage is set for the first two to three years, and the percentage will be variable for the remaining term.
Currently, loan rates fluctuate at around 2.5 – 3.5% per annum. Against the background of much more expensive Russian loans, rates in Spanish banks are especially attractive for our compatriots.
Loan payments are made monthly. The size and frequency of payments must be specified in the mortgage lending contract. At the same time, their size should not exceed 35% of the sum of the aggregate monthly income of loan beneficiaries.
To get a mortgage loan, in the Spanish bank, where the account is opened, you need to submit the following documents:
a copy of the preliminary contract of sale;
income tax return for the previous year and for the past period of the current year;
an extract from the credit bureau;
certificate from the Russian bank on the availability of funds in the account;
NIE – the tax number of the foreigner, which is issued before the signing of any agreements or after the buyer pledged for the selected property.
All documents must be translated into Spanish and notarized. If the property is acquired in the share ownership, all documents are provided by each of the future owners.
As a rule, the bank considers the application for a mortgage loan from two to five weeks.
You can get credit approval without leaving the country.
Tranio managers begin negotiations in advance with the bank in advance, even before the client’s visit to Spain. A copy of the first page of a foreign passport of the client who draws up the loan, his tax return and an extract from the credit bureau are provided to the Spanish bank.
Thus, prior approval of the loan can be obtained even in Russia, before the conclusion of the transaction.
According to Spanish law, both the execution of a mortgage lending contract and the full fulfillment of obligations under it are certified by a notary and are registered in the Property Register.
Mortgage loan is paid in monthly installments from an account opened with a Spanish bank. For late payment accrued interest. And in the absence of payments for six months or more, the bank collects credit debt through the courts. It is recommended to replenish the account with a cashless transfer from the country of which the real estate buyer who has issued the loan is a resident.
For early repayment of the entire loan or part of it may be charged a fee, which is indicated in the loan agreement. Charges for early repayment of a loan under the law may not exceed 1% of the loan amount.