Anyone who is in the position of applying for a mortgage with a Spanish bank would have certain questions: i.e. How much can I borrow? How do I go about it? What do I need? This article will attempt to answer all of these questions so that anyone who is currently applying for a mortgage, or perhaps contemplating doing so, will know what is required. Firstly, the amount of money that you can ask for must be established. Generally this varies depending on whether we are talking about tax residents or non tax residents. As a general rule for those who are tax residents, the limit would be 80% of the purchase price or of the banks valuation of the property, (the lower of the two values is the one used for the calculations). On the other hand, for non-tax residents the maximum amount would be 65-70% of the lowest valuation. These figures can still vary depending on the circumstances of each individual and on the type of property being purchased which could possibly cause these percentages to increase considerably to reach even 95-100% of the purchase value. Once we have established how much we can borrow, the next step is to contact the bank so that it can study the viability of the operation. Following we have included a list of the requirements and documentation necessary to apply for a mortgage from any of the banks operating in Spain. 1. If you are employed: Form P60 The last three pay slips The last statement of income (“Tax Return”) Letter of recommendation from employer Proof of any other income 2. If you are a self-employed: Last income tax (“Tax Return”) Last 3 pay slips Extract from the business accounts for the last 2 years Proof of any other income. Along with the above documentation, you should also include copies of any documentation relating to the property that you wish to purchase such as: “Nota Simple” (from the local property Registry), IBI receipt (the rates receipt from the Town Hall), Property deed, private contract of sale, etc… Once the bank has analyzed all of the above documents provided by the applicant, it will give its verdict as to the feasibility, or otherwise, of the operation. In the event that the result is positive, the next step would be for the bank to arrange a valuation of the property in question. When the bank has the valuation it can then issue the final official mortgage offer called the “Oferta Vinculante”. This is a document supplied by the bank detailing the amount of the mortgage and it would include any conditions that have been negotiated beforehand. Finally, a mutually agreeable time and date would be arranged for all parties to meet at a Notary to sign the Deed of Sale between vendor and buyer, and at the same time to sign the Mortgage Deed with the bank. Hopefully this article is useful to those who are applying for a mortgage and to those that may have doubts as to the viability of getting a mortgage here in Spain. For more information please contact Axarquía Solicitors to make a free no obligation appointment. Jose Manuel Garzón – Senior Partner Axarquía Solicitors is part of Marbellasolicitors SLP, a group of bilingual lawyers that have more than 15 years experience assisting foreign buyers and vendors in Andalucía, both on the coast and inland. Please e-mail: mail@axarquiasolicitors.com or ring 952 901 225. www.axarquíasolicitors.com
