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A mortgage broker acts as a middleman between you and potential lenders. The broker’s job is to work on your behalf with several banks to find mortgage lenders with competitive interest rates that best fit your needs. Mortgage brokers have a well-developed stable of lenders they work with, which can make your life easier.
Mortgage brokers are licensed and regulated financial professionals. They do a lot of the legwork — from gathering documents from you to pulling your credit history and verifying your income and employment — and use the information to apply for loans for you with several lenders in a short time frame.
5 important things that you need to know about applying for a Mortgage in Spain as a non-resident buyer.
In the UK or other northern countries, we are accustomed to consult the bank or a financial advisor before we go house hunting. This often happens only after people have already signed a purchase agreement for a purchase of a second home.
It's better and safer if you do this in advance as you will have a better idea and complete understanding of what can and can't be done; whether it is to spend a little more for your absolute dream home, or because the potential rental income could be larger etc.
Before you decide to go through with your purchase, it is recommended to carry out a feasibility test. This way you know exactly what the financial possibilities are and what the expected monthly expenses will be.
With a good understanding of your financial possibilities, you can search for the property that fits your wishes and budget. One of the advantages of a mortgage is that you hold on to your liquidity and in addition, you can use favourable interest rates.
Below we briefly describe the terms and conditions for financing in Spain and the application process of the mortgage.
1. The maximum duration
The maximum term of a Spanish mortgage for non-residents is 25 years, with a maximum age of 75 years.
2. The maximum funding rate
The maximum percentage of finance is 70% of the purchase price, with certain exceptions of 80% or of the valuation value, depending on which of the two has the lowest value. This means you are required to contribute approximately 40% of the purchase price from your own funds.
3. The mortgage type
In Spain it is customary for the lender to do repayment mortgages. This means that the interest and repayment of the capital is paid monthly and that the complete amount will be paid off during the duration of the loan.
4. Interest rates
You can choose between Variable or a Fixed rate mortgage.
The Variable rate is calculated based on the Euribor (Euro Interbank Offered Rate) Euribor is the interest rate at which a large number of European banks do provide short term loans to one another. Banks which borrow money from other banks can use these funds to provide loans to other parties. In fact, Euribor is the purchase price a bank does have to pay for a short-term loan.
With the Fixed rate mortgage your interest rate remains the same for the complete term of your loan.
The Variable rate is normally lower than the Fixed rate. Both options have advantages and depending on your profile we can determine which option is the most interesting for you.
5. Lead time
The lead time from the start of a mortgage application to signing at the notary is on average 6 to 8 weeks, but due to the current Covid situation this can take a bit longer than usual.
As there are many mortgage lenders in the Spanish market, it is recommended to contact a mortgage advisor. This will help you simplify the application process, avoid unnecessary delays and protect you from any pitfalls.
We will be happy to put you in touch with our financial specialist. He is 100% independent, provides all services in your own language, speaks fluent Spanish and has direct access to several mortgage providers in the Spanish market.
From the first contact with the bank to the signing of the deeds at the notary, he will assist you. Even after you have finalized your mortgage, you can always contact him with any questions you may have regarding your mortgage loan.
3 good reasons to consult a mortgage advisor:
- A mortgage consultant will give you direct access to multiple lenders
- Service in your own language through one single point of contact
- Independent advice and the best conditions brokered by a registered consultant
If you wish to receive more information regarding financing Spanish Real Estate or carry out a free feasibility test, please don't hesitate to contact us.
Robin Christiani | Registered mortgage consultant in Spain
Website: www.spaansehypotheker.nl
Email: [email protected]
Office number: +34 675 072 836
