MORTGAGES

If you need to raise finance to purchase your property, there are several options available to you, both in Spain and the UK. The main difference between securing finance in the UK and in Spain is that whereas the former can be arranged to finance stage payments, the latter is only available on completion.

If you decide to raise the funds in the UK, you can do so either by re-mortgaging an existing property or, by taking out a personal loan. In either case, you will need to transfer the funds from a bank account in the UK to your bank account in Spain.

Alternatively, you may wish to consider raising the funds for completion through a Spanish mortgage. Spanish banks offer competitive mortgages with low rates of interest, to both non-residents and residents of Spain. Typically, the banks will grant up to 70% of their valuation of the property for a term of up to 20 years.

Spain offers several kinds of mortgages including fixed and variable interest rates or, indeed, a combination of both. Endowment or pension-backed mortgages are not available, although interest-only mortgages are now being offered by some lenders.

The Bank will need documentation from you to be able to consider your mortgage application including a copy income tax returns, copy salary slips or, copy accounts if you are self-employed.

If you are buying off plan the developer may already have a mortgage in place, which you can simply take-over (subrogate) on completion, subject to your financial status.

The mortgage arrangement fees for securing a mortgage offer from a Spanish bank amount to approximately 3% of the mortgage advance. The fees include Stamp Duty, the bank’s commission, legal, notary and land registry fees.

In many instances, the mortgage arrangement fees will be lower if you take-over the developer’s mortgage on completion.