Getting a mortgage in Spain
With the euro weaker in years and real estate up for grabs, Spain can offer retired people the opportunity that they may not have elsewhere, although Brexit may raise property costs. On the other hand, Spain encourages foreign investors with it’s so called “golden visa” or visa-and-property scheme where, under certain conditions, including a minimum investment scheme that can be spread over various properties, investors receive a Spanish residency permit. Spanish banks, too, produce an array of mortgage products specifically designed for foreign and expat investors. So getting a mortgage in Spain is an attractive proposition.
Thinking of getting a mortgage in Spain?
You’ll find property tends to be far cheaper in rural than inland Spain. You’ll likely be able to buy a one-bedroom cottage near the coast for around €100,000. In fact, the Independent wrote that for 188,000 British pounds, some expats and enterprising entrepreneurs snap up a whole village that is desolate, since youngsters leave for major towns in search of jobs, while aging people die leaving homes to be abandoned. The 2013 report noted that Galicia, in Spain’s northwest Iberian Peninsula, had some small hamlets going for around £34,000.
The low down of getting a mortgage in Spain
You can get a mortgage in Spain through its banks and cajas, namely saving banks, where plans are sold either directly by the lenders or through mortgage brokers. Rates and terms vary from inflexible and expensive mortgages to cheaper and flexible ones. In fact, since lenders often set their own prices, you’ll find a considerable difference in terms.
Non-residents can land up to 70% in mortgage loans while residents may hook up to 100%. On the whole, lenders want to see that your liabilities are less than 35% of your total monthly income. You’ll need to produce documents that include wage slips from the last three months and bank statements of the last six months. If you are self-employed, you’ll need to show copies of last year’s business bank statements as well as your previous six months personal statements.
The aval and NIE
Non-residents will also need to produce a guarantor (called an aval) who agrees to cover mortgage debt. Non-residents will also have to procure an EIN, the equivalent of a social security identification which is needed for selling and buying property. You can get this from any local police station or, outside Spain, from your local Spanish consulate.
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