Arranging a mortgage

Sundrenched Villas can assist you in obtaining a mortgage here in Spain.

We work with many leading banks both here in El Campello and the UK. Please see below the paper work you would require to begin the mortgage process.

Supporting documentation to apply for mortgages

Passport
N.I.E Number ( we will apply for this prior to you signing for your property)
Employment details

Employee Applicant Income tax forms ( P60) for that year
Latest 3 current wage slips or pension slips
last 3 months bank account statements
Self-Employed Applicant
Activity/profession/business Inland revenue Full Tax Return for the year ending April 2007
Chartered accountants report for the last 2 years (balance sheets, profit and loss accounts).
Last 3 months bank account statements

The bank will also need a copy of the Title deed and property contract which we will provide.

NB: if you require a mortgage above 70% the bank will ask you for a credit report which you can obtain at www.creditexpert.co.uk Please do not hesitate to contact us should you have any further queries.

Mortgages in Spain

The Spanish mortgage industry is still in its infancy compared with the USA and UK. As recently as 25 years ago, mortgages were almost unknown in Spain. However with Spanish banks now having an international outlook, the market here is now very sophisticated and the banks are becoming very innovative in their product range.

The first thing to realise is that, Spanish banks are probably more flexible than their British counterparts with mortgages being granted to persons up to the age of 75 years here in Spain.

What Spanish bank managers like to see are “ingresos”, ie, a steady income coming regularly into the account. So a good set of accounts is necessary as they also like to see proof of income, ie, payslips (nominas), tax returns, pensions, dividends etc… After that the procedure is very similar to the UK.

Survey fee (banks here insist on a pretty comprehensive survey being taken out, there are specialist firms who carry these out and the normal cost is between 250 and 350 euros.

A charge of 1% of the value of the property to be subject to the mortgage – Commission.
1% notary fee this is in addition to the 1% payable for the registration of the title deed (Escritura).
Nb some banks do not charge commission if you want to pay off lump sums of your mortgage.
There may be various small extra charges depending on the bank. (Ask for a printed offer in English when possible, from the bank manager.)
They will insist you take out a household insurance policy with the bank. This practice is to safe guard the bank as “no insurance, no mortgage” but you can also organize your own insurance then cancel the banks insurance within 28 days but please check with your bank about their insurance set up terms and conditions. The cost of the insurance obviously depends on type of property, value etc.

As mentioned before, mortgages in Spain are relatively new, but the product range is now almost the same as the UK.

Types of mortgage always ask your bank manager first as these may not be on offer at His/Her banks.

FixedRate The rate of interest is fixed at the beginning of a mortgage and it stays the same. The maximum period is usually 12 years, early repayment can cost up to 5% of the outstanding sum.
Flexible Rates can vary and usually recalculated every year in line with European Central Bank rate. The rate can go up and down at regular intervals. The Maximum term is 30 years, early repayment is normally charged at 1% of the outstanding balance.
Others Interest only mortgages are now available here in Spain.

Terms of mortgages vary from bank to bank, but generally a resident of Spain (with Tarjeta de Residencia) can obtain a loan of up to 50 years or that it will end before the person is 75. Persons living in Spain for more than 183 days per annum, but without Tarjeta de Residencia are classed as residents for tax purposes but not as residents for mortgages, so they are generally limited to 40 year repayment periods.

Loans are granted up to 70% (in sum cases even higher) of valuation or of the contract purchase price, the valuer is usually fairly generous so this tends to be a minimum figure. If you require a mortgage above 70% the bank would need you to supply a credit check. www.creditexpert.co.uk. A lot also depends on the relationship the bank manager has with his client or the estate agent or developer selling the property.

It is very important to have the formal mortgage offer in written form, if the bank is unable to provide this in English get a translation of it when ever possible.

If your unsure of anything please ask as we can find the right mortgage for you.