Are you considering purchasing a property in Spain?
Is it the right time to purchase a property with finance?
The current Spanish property market is extremely well priced and interest rates are at an all-time low. Banks are financing properties and with such good deals to be had, it’s madness not to want to get your foot on the property ladder or make a long-term investment.
Most people who consider purchasing a property, not only in Spain but worldwide will need finance of some sort or might benefit from finance in some respects. Usually, that finance is in the form of a loan or a mortgage.
Applying for a loan or a mortgage in a foreign country in a different language is overwhelming at best, so we have compiled a list of the most common things to bear in mind before searching for a mortgage:
- The Bank which grants you a mortgage will insist that the property is in the mortgage holder’s name, of course, the property and the debt can be owned by more than one person.
- The deeds of sale/purchase and the constitution of the mortgage is a simultaneous act, so the bank will have a representative present at the time of the signing of the deeds.
- Always hire your own English speaking, independent lawyer to go over every detail of the conditions of the mortgage.
- Hire a lawyer to do the due diligence on the property. This will include checking for any debt held by the property including previous mortgages. Your lawyer will be able to make sure that you don’t become responsible for any of these possible debts and that they are cleared before the purchase takes place.
- If you wish to take over an existing debt on the property, your lawyer should be issued with the following documentation by the vendor or the developer :
- A certificate issued by the financial entity that holds the debt stating the total balance due.
- Remember to ask the financial entity that holds the debt for a more favourable interest rate and terms and conditions for payment and ask your lawyer to check the mortgage contract for abusive clauses.
So, what will you require in order to apply for a mortgage loan in Spain?
Most Spanish banks will require the following documentation from the future potential holders of the mortgage loan:
- Last two income tax returns.
- Last year of bank statements.
- Proof of income.
- A list of debts such as other mortgages or loans held by the applicant.
- A list of the applicant’s assets.
- A copy of the applicant´s valid passport.
- A copy of the applicant´s valid NIE or certificate of residence.
If you wish to open a bank account in Spain or apply for a mortgage, we can deal with all the paperwork on your behalf. Please do not hesitate to contact a real state lawyer for further information about this or any other legal matter.