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Mortgages
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Your Future
Building Brighter Futures, One Mortgage at a Time.
At Iberian Mortgages, we're all about helping you make your dream of owning a home in Spain a reality. We work with top banks in Spain, and we won't charge you any fees to find you the perfect mortgage deal.
Here's how we do it:
Personalized Help: We'll take a close look at your situation and approach numerous banks to find the best mortgage options that fit your needs and finances.
Great Deals: Whether you want a fixed, variable, or mixed interest rate, we'll make sure you get the best possible terms available in Spain, so you can feel good about your finances.
Protecting Your Credit: Don't worry about your credit score - it won't be affected until you accept a mortgage offer at the notary's office.
Why Pick Us:
Loads of Experience: We've been doing this for over 15 years, and we've got the success stories to prove it. You can trust us to make getting a mortgage in Spain as smooth as can be.
Multilingual Experts: Our team speaks many languages and is certified under the Spanish Mortgage Law, so we can give you an excellent service in a language you're comfortable with. Equipped with certifications compliant with the Spanish Mortgage Law (LCCI 5/2019).
Covering All the Bases: We'll carefully go over all the costs tied to your Spanish mortgage, including bank fees, early repayment charges, taxes, valuations, and more. Our goal is to give you clear, professional advice so you understand everything.
Getting a mortgage in Spain has never been easier with Iberian Mortgages. We're here to walk you through the whole process, explaining how much you can borrow from a Spanish bank, what it'll cost, how much money you'll need upfront, and what paperwork you'll need. Your journey to owning a home in Spain starts with us.
Get in touch today and let's take the first step toward making your dream of owning a home in Spain a reality.
TYPES OF MORTGAGES
Mortgage Financing Options A mortgage represents a financial agreement facilitated by a lending institution, such as a bank or mortgage lender, that enables individuals to acquire residential or commercial property. The property itself serves as collateral to secure the loan's repayment. Lending entities typically finance up to 70% of the lesser of the property's purchase price or appraised value. Prospective borrowers should be prepared to contribute approximately 30% of the property's value as a down payment, in addition to covering any ancillary transaction expenses. Mortgage products are commonly categorized according to the structure of the interest rate. Fixed-rate mortgages offer consistent monthly payments for the duration of the loan, providing borrowers with financial predictability. Variable mortgages, conversely, adjust payments based on fluctuations in a benchmark interest rate. Mixed-rate mortgages combine these approaches, starting with a fixed interest period followed by variable rates that may increase or decrease in line with the prevailing standard variable rate. The appropriate mortgage type will depend on an individual's financial objectives and risk tolerance. The maximum term for mortgage repayment typically extends until the borrower reaches 75 years of age, with a maximum term limit of 30 years.
STEP BY STEP PROCESS
Step One.
1. Apply for a mortgage.
To initiate your mortgage application, you can contact us on the details listed on the website. Depending on your tax status, you can borrow up to 70% of the property value if you pay taxes outside of Spain, or up to 80% if you are a Spanish taxpayer (70% for second homes). The loan amount will be determined based on the property's valuation or price, whichever is lower.
2.The following documents are required for your mortgage application:
Copies of your Passport or NIE for all parties involved in the mortgage - Your most recent tax declaration or P60 - Your last three payslips - Details of any other properties you own, including potential rental income - A bank statement covering the last 6 months - An Experian credit report
3. Who can apply for a mortgage?
Individuals over the age of 18 are eligible to apply for a loan in Spain, irrespective of their income source, tax obligations, or residency status. The borrowing limit is contingent on your income and existing debts. Typically, Spanish lenders will refrain from lending if your total mortgage and loan payments exceed 40% of your net income after taxes. Our in-house risk assessment team is available to assist you in determining your borrowing capacity.
4. Income & debt:
Income: Spanish banks will consider income that is verifiable through tax returns or stems from rental earnings from a property with active lease agreements. While bonuses can be factored in, evidence of consistent income must be provided. A minimum of 2 years' worth of income will need to be demonstrated.
Debt: Debts encompass credit card balances, existing loans, and outstanding mortgage payments. Additionally, future mortgage payments for the Spanish property should be included (use the Spanish mortgage calculator to obtain this amount). Expenditure on groceries and other household items does not factor into your debt calculation.
5. What is the expected duration of the application process?
Upon submission of your application, our risk team will compile a lender report for the banks. Assuming all necessary documentation is in place, you can anticipate receiving an offer within approximately 7-10 working days. While it is feasible to receive an offer more promptly, the timeline may vary based on the lenders' workload and the complexity of your application. Any delay in providing additional paperwork requested by the lender will impact on the processing time for the offer. Please note that as we work with third-party banking institutions, we do not have control over their procedures, but our team is committed to facilitating a timely application process.
Step Two.
1. Property Reservation:
Upon identifying a property, it is advisable to temporarily remove it from the market while you conduct legal checks and a valuation, typically taking around 30 days. This timeline may be extended if legal issues with the property arise. Deposit: Most agents will accept a deposit of 3,000 Euros, though for properties exceeding 300,000 Euros, they may request 1% of the purchase price. Refundable Deposit Scenarios: - Subject to finance: A refundable clause can be included in case you encounter mortgage-related issues preventing the purchase. - Valuation: If the property's valuation is below the asking price, you may negotiate the price or obtain a refund. - Legalities: Refundability applies if there are legal or licensing issues, outstanding debts, etc. It is crucial to include these clauses in the reservation contract. Failure to do so may put your deposit at risk.
2. Legal checks:
Legal checks involve ensuring that the property you intend to purchase is legally sound. These checks should be carried out before proceeding to the next stage and typically include: - Verifying the property's title/ownership. - Confirming that the property possesses all necessary licenses. - Reviewing and/or completing the private contract that outlines the terms and conditions of the property sale. - Finalizing the purchase before a public notary, either on your behalf or in your presence (additional costs may apply based on location). - Registering and checking the cadastral information. - Examining the cadastral and land registry for any discrepancies. - Checking tax registration and investigating any outstanding debts, such as community fees, utilities, and town hall sanctions.
3. Property valuation:
If you are obtaining a mortgage for the property purchase, a third-party company accepted by the bank will need to conduct a valuation. The bank's lending amount will be determined based on this valuation if it is lower than the purchase price. Valuations typically take between 7-14 days to complete, and our team can arrange this on your behalf.
4. Private purchase contract (Arras)
The "Contrato de Arras" is a private purchase contract between you and the property owner. Upon signing, you will be required to pay 10% of the purchase price to the owner. Once signed, both you and the owner are committed to the purchase. If you fail to complete the purchase, you will forfeit the 10% payment along with your original deposit. However, if the owner fails to complete the sale, the terms of the contract will determine whether you receive a full refund along with an additional 10% or any other negotiated compensation.
5. The final purchase:
The final purchase will take place at a Spanish notary's office, where your lawyer will handle the arrangements and communication with various parties such as the bank, sellers, and agents. If you are unable to attend, your lawyer can represent you with a Power of Attorney. After all the necessary contracts are signed and payments distributed (with the bank bringing checks for the mortgage, deposit, and taxes), you will receive a copy of the deeds and the keys to the property.