Spanish Property Mortgages
After making the decision to go ahead and purchase that beautiful property in Spain, a Spanish mortgage lender is often used to raise the required funds.
We have among our contacts several trusted bankers who deal with investors from abroad on a regular basis and have a good command of the English language. They can assist you finding the mortgage that fits your needs and that has favorable terms and conditions. Mortgage brokers search a huge list of mortgage products from many financial institutions and we can refer you to English speaking ones too. As a matter of policy, we will not accept any referral payment from these contacts, which allows us to refer you to our contacts without any conflicts of interest.
Having your law firm acting on your behalf can be helpful, because some clauses in mortgage deals can be negotiated and others need reviewing to make sure you fully understand the details. We commonly help people to obtain the right to make extra payments on mortgage without penalties or fees and have enlightened customers about unexpected interest revision mechanisms.
Your mortgage deed will be signed at the same time as the purchase deed at the notary when you complete the purchase. Because of this, it’s important that the notary’s office and your mortgage lender communicate properly and are coordinated. We assist in this process by overseeing everyone involved and double-checking things that may be taken for granted but could cause delays and in the worst case create a problem right at signing time. In some cases last minute issues have caused the completion to be postponed and buyers had to make a repeat trip from abroad just for the completion, which we’re avoiding by staying on top of things.
Taking out a mortgage on the Spanish property you’re aiming to purchase is a process that can take from 3 up to 8 weeks, starting from finding a mortgage lender that accepts your application. Keeping this in mind is of higher importance when you are entering into a pre-agreement that includes a clause to complete by a certain date. Financial penalties for missing that deadline are usually applicable in that type of pre-agreement.
It’s also worth noting that taking out a mortgage will incur a few fees and the bank will ask you to pay those up front.
The main fees are:
– A property valuation fee the mortgage lender picks an independent expert to assess the value of the property for the bank to make sure the mortgage amount is within the acceptable range.
– Notary and registration fees (the mortgage deed needs to be registered just like the purchase deed)
– Property insurance against the risk of fire and other events destroying the property
– Stamp duty (which is a percentage of the mortgage amount, there are regional variations but it is usually 0.5%)
– Mortgage account opening fee: this varies a lot by bank and even by different mortgage product within banks, so comparing this cost when deciding on which mortgage to go for is key.