by Alpha Estates | Aug 3, 2018 | REAL ESTATE COSTA DEL SOL - MARBELLA
Spanish banks provide mortgages to residents and non-residents alike. Terms and conditions in both cases are similar. Residents who are looking at properties for sale in Marbella – or elsewhere in Spain – to use as their main home will generally be able to borrow up to 80% of the home value. Non-residents wanting to buy a villa or apartment on the Costa del Sol can expect (depending on credit worthiness) to borrow up to 70% of the bank-assessed value.
We highly recommend to our customers to get your mortgage PRE-approved prior to your visit to the Costa del Sol to purchase the property. Having your mortgage pre-approved with the bank helps you to plan your finances accordingly and gives you more negotiation power once you have found your dream home.
The following documentation is required to start a mortgage application process:
National Identity Document
Proof of income
a) In case you are salaried worker
2 last salary slips
2 last year income statements (P60)
Letter from the company. ( the letter from the company must indicate the type of your contract, seniority, annual salary and position of the employee.
b) In case you are self-employed worker
Accountant’s letter ( it must indicate the name of the company, sector in which it operates and registry details, confirmation of turnover and corporate profits of the last 2 years together with the salary, dividends and bonuses self-employed worker received)
Income statement for the past two years
`Annual accounts for the last two years
OTHER DOCUMENTS:
Proof of other source of income
Credit report
Bank statements for the past 6 months
Every bank has its own policies and procedures when it comes to obtaining the mortgage in Spain, but these documents will be required to start the application process. After considering these documents your bank may request additional information from the applicant. (typically this is a good sign).
So, what types of mortgages are available?
The majority of mortgages offered by Spanish lenders are variable rate repayment mortgages. This means a proportion of your monthly payment is used to repay the capital loaned, with the rest accounted for by interest payments. Interest is normally calculated by using the Euribor rate (European inter-bank offered rate) plus a percentage — for example Euribor + 2%. Rates vary according to lender, so it is worth your while to shop around. Fixed rate mortgages are also available, with interest rates set at a slightly higher level than current variable rates.
FAQs about obtaining mortgage on the Costa del Sol:
1. How long does it take to get a mortgage in Spain, from first contact to having the funds available, assuming I’ve already found a property to buy?
Typically around 4 to 6 weeks. Sometimes it may take longer if the holiday month of August falls in between, or if you have a complicated profile.
2. What is the debt-to-income ratio (interest payments as a % of net disposable income)?
Interest & capital payments should not exceed 30% of net disposable income.
3. If I already own a mortgage-free property in Spain, can I get an equity-release mortgage on it?
No
4. Can I get a fixed-rate mortgage in Spain?
Yes
5. Should I appoint a lawyer?
We strongly recommend that you appoint a lawyer. They will ensure that all the necessary checks are carried out on the property. If anything goes wrong, a lawyer’s job is to protect your interests.
Should you have any questions about obtaining a mortgage on the Costa del Sol, please get in touch with us. Alpha Estates Marbella team has many years of experience and is happy to advise you on the correct steps to take and contacts.
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Disclaimer: This blog is intended for information only and should not be viewed as a definitive guide. Legal procedures and costs may change.
by Alpha Estates | Jul 31, 2018 | REAL ESTATE COSTA DEL SOL - MARBELLA
It is so easy to fall in love with Marbella, but how easy is it to purchase real estate on the Costa del Sol once you have found your dream home?
The answer is – it is pretty straightforward, but, as is the case of purchasing in a foreign country you need to be knowledgable of the local processes and culture. Here we give you an outline of the property buying process on the Costa del Sol.
1. Buying resale properties
The Reservation contract is used in Spain as a standard procedure to reserve the property. Typically it would set out the basic terms and conditions of the agreement between the seller and the buyer. This document should specify the following:
your full names
agreed selling price
address of the property
date to sign the Private Purchase Contract ( if applicable)
date to sign title deeds
special conditions ( as subject to a mortgage, subject to due diligence on both property and community, subject to the inventory being agreed between buyer and seller)
the deposit amount placed to reserve the property. At this point the property is officially off the market.
Typically the reservation deposit is 6,000 euros which is refundable should your lawyer find any issues during the due diligence checks made against the property that cannot be resolved. This deposit can be paid by credit card or bank transfer and shall be held in the client escrow account of your lawyer.
The whole process from signing the reservation contract to signing of title deeds and receiving the keys to your new home typically lasts between 4 to 8 weeks.
2. Buying an off plan property on the Costa del Sol
In case you decide to buy an off plan property on the Costa del Sol, the reservation processes may vary depending on the phase of the building permission and construction.
Typically it is as follows:
– An initial reservation deposit (between €6,000 – €10,000) is paid to remove the selected unit from the market. This may be paid directly to the developer, or held in your lawyers escrow account. This allows for searches to be made to ensure the development is legally sound. If not this is refundable.
– Once searches are completed, you will need to make the first down payment, and sign the private purchase contract. This is normally between 10% and 30% of the final price. Money paid will be covered by a bank guarantee/insurance policy provided by the developer.
– In some cases, stage payments may be due as milestones are reached in the construction.
– On completion, the builder will apply for the first occupation license. Once these have been granted (without them you will be unable to have utilities connected), a final payment will be due (usually 60-70% of the price). You will sign the deeds and show proof of payment before a notary.
3. Buying bank owned property ( bank repossessions)
In case you decide to purchase a bank repossession property on the Costa del Sol, the bank who owns the property have standard procedure which they follow. It may differ from the procedure of buying resale property, and sometimes may be confusing. Your lawyer will act on your behalf to communicate/ negotiate the terms with the bank who owns the property. At the end of the day, buying bank repossessed properties are worth it as in most of the cases they are sold below market prices.
Alpha Estates Marbella has a wealth of real estate experience on the Costa del Sol and we are dedicated to helping you find your dream home and giving you the knowledge, contacts and help to do so. Apart from that we always can recommend accredited lawyers that speak your language, as well as offer you a full real estate service from A to Z. We aim to establish easy going communication with our clients and our multilingual team speaks seven languages – English, Spanish, Swedish, Norwegian, French, Russian and Italian.
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