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FAQ
Am I eligible for a mortgage?
I cannot prove my income. Can you still help?
What happens if I want to pull out of the application?
Can I finance 100% of the purchase price?
What extra costs are involved in purchasing a property in Spain?
What is a Fixed Rate Mortgage?
What is a Flexible Mortgage?
How long will it take to obtain a mortgage?
What documentation
will I need?
How do I apply for a mortgage?
Am I eligible for a mortgage?
Spanish banks base their decision on your ability to repay the mortgage you are asking for upon looking at your net monthly income. You may prove your income with payslips, tax returns and / or bank current accounts or a statement of your tax advisor.
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I cannot prove my income. Can you still help?
At the present situation those applications
are turned down by almst all banks.
However, we will need to
thoroughly asses all possibilities available on the market.
Normally in those circumstances mortgages of only 50% of the
purchase price of your Spanish property will be available. All
that is usually required is a bank reference letter, a copy of
your passport and a completed application form.
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What happens if I want to pull
out of the application?
In case you don't want to proceed with the
mortgage application you simply inform us. We will then destroy
your documents sent and the process is terminated.
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Can I finance 100% of the purchase price?
Nothing is impossible,
however, it is very
difficult to obtain.
It mainly dependents on the valuation of the property, and is more likely if you are buying off-plan.
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What extra costs are involved in purchasing a property in Spain?
To buy a home in Spain with the help of a mortgage, you need to budget about 10-12% of the purchase price as cover for extra costs. The following are some such typical charges and costs:
• Purchase Tax on reseal property: 7%
• or IVA [Spanish VAT] on a new build: 7% and Stamp Duty: 1%
• Lawyer’s fees: 1% - 2%
• Notary & Land Registry fees: 0,5%
• Mortgage Tax: 1%
IN ADDITION you must take into account the mortgage costs, which include bank arrangement fees of around 1,25%, valuation fees and the building insurance.
Please note that we can offer through our conveyancing department a full conveyancing service for your purchase at a special rate in case you take out a mortgage with us.
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What is a Fixed Rate Mortgage?
As its name implies, a fixed rate mortgage offers a fixed rate of interest for a specified period. This type of mortgage can be particularly good if you are tied to a financial budget. It enables you, for a specific period of time, to know that your set payments will not alter. After a period this mortgage type would revert to the standard variable rate. It is worth noting that should interest rates drop during your fixed rate period then you will continue to pay the agreed fix amount.
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What is a Flexible Mortgage?
This allows as the name suggests an element of flexibility in your repayments. This can be in overpayments to reduce your mortgage total or the time left on your mortgage reduced. Of course some lenders also allow payment holidays. This mortgage can be well suited for those who are self employed. This mortgage has become very popular in recent years.
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How long will it take to obtain a mortgage?
Based on our experience of Spanish lenders and the mortgage application process, we can normally give a verbal indication within 2-3 days of whether your application is likely to be successful. This is subject to full application, required documentation and a valuation. Once all the paperwork is sent to the bank the full process should take 4-6 weeks.
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What documentation
will I need?
About yourself:
About
the property:
-
Any contract you have signed
or are supposed to sign regarding the property you would like to buy
showing where the property is registered (Land Registry).
-
A recent copy of the Land Registry (Nota simple) of the property that
will be charged with the mortgage – must not be older than three
months
-
Any deed (escritura) regarding the property (declaración de obra nueva,
declaracion de division horizontal, escritura de compraventa, etc.)
- Latest I.B.I. certificate (yearly property tax)
-
In case you wish to finance any building or
modification of an existing property: a detailed quote including
material, if applicable the building permit, the project with plans,
and further licences.
In case you are employed:
In case you are self
employed / free lance:
In case you
are the Managing director / employee of your own company and you
receive income from that company:
-
Latest P60 / tax return
- Last three payslips (the period covered must not be inferior than
three months prior to the mortgage application)
- Copy of your employment contract
- Bank statements of the last three months prior to the mortgage
application showing that your receive the income from your company
- Bank statements of the last twenty four months prior to the mortgage
application showing that your receive the dividends from your company
- Last company accounts
- Copy of the company house / Certifiacte of good standing
In all above cases: Information from
the CREDIT BUREAU
You may obtian a CREDIT BUREAU
Information here:
http://www.equifax.co.uk/
IMPORTANT
NOTICE: PLEASE ALLOW AT LEAST FOUR TO SIX WEEKS TO RECEIVE THE
MORTGAGE.
ANYBODY WHO
PROMISES YOU TO GET THE MORTGAGE READY IN A SHORTER PERIOD OF TIME IN
ORDER TO PERSUADE YOU TO SIGN AN OPTION CONTRACT (PRE - CONTRACT) WITH
A VERY CLOSE DEADLINE WILL SERIOUSLY PUT IN DANGER YOUR INTERESTS AND
YOU MAY END UP LOOSING YOUR DEPOSIT TO THE VENDOR!!!
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How do I apply for a mortgage?
Overseas Mortgage Shop, S.L. is specialized in mortgage
applications. We will
take all steps necessary to get the best mortgage deal for you. In order to accomplish this task
please fill in our
mortgage form and send the list of the required information.
You may also contact us to discuss your needs.
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