Obtaining a mortgage

Mortgage costs

Depending on which lender has been selected to provide your mortgage:                                                                               Or enquire direct  from Mortgage Directa now

• The arrangement fee will be between 1% and 2% of the loan.
• The valuation fee will be approximately €500 depending on the property value.
• There are also the notary costs, taxes, property registration and legal fees of the lender.
• For easy calculations the above costs normally total up to between 8-9% this cost must be considered when purchasing property in Spain or UK.

The maximum amount you can borrow will also depend on your income.
In general the rule of thumb is that you will be advanced up to 3 times your gross annual income. The amount of down payment is also important, also one should take care about the factors in different type of savings as retirement, college, needs and others.

Main lenders

Most Spanish banks (Sol Bank, Deutsche bank, BBV and Bank of Atlántico) and Building Societies (Halifax, Norwich & Peterborough, and Abbey National) will offer mortgages for properties. Properties bought off plan can also be mortgaged, on completion.

Mortgage currency

Mortgages are available in most major currencies. We strongly advise however, that you set up your mortgage in EUROS. This safeguards your risk of exposure to currency fluctuations.

Interest rates

Interest rates for mortgages in Euro are based on EURIBOR (Euro Inter Bank Offered Rate). The lenders will normally charge EURIBOR + 1.25% to 2,75% but individual circumstances will determine the exact interest rate, which could be higher or lower. It is common to find that some lenders offer a lower "Start up" interest rate of 3.75% for the first year then go up to EURIBOR + 1.25% from Year 2 onwards.

Documents required

The documentation required will vary from one lender to the next. As a general guideline we have listed most of the paperwork you are likely to need, it is a good idea to prepare much of these as soon as possible. If you are employed you will need to produce:

• Last 3 wage /salary slips.
• Last income tax declaration (P60 in the UK) or evidence of latest annual tax assessment (if you live in a tax-free environment then this is not applicable).
• Copies of current bank statements (last 6 months).
• Bank reference letter.
• Letter from your employer confirming date of employment and proof of income.
• Copy of passport / residence permit if you are resident.
• N.I.E. number

If you are self-employed you will need to produce:

• Latest income tax declaration (where applicable).
• Copies of the accounts for the last 2 / 3 years.
• Chartered Accountants Company report, confirming your annual personal drawings from the company.
• Copy of your passport / residence permit (residencia) if you are a resident.
• N.I.E. number
• Personal bank statements (6 months).
• Bank reference letter.