If you’re not a resident in Spain, what are your mortgage options?

The Spanish property market is hotter now than at any other time in the last ten years, and we are regularly asked about mortgage deals currently available, especially for non-residents. Many non-residents believe the mortgage process to be difficult, but it's not impossible. Most Spanish banks are happy to lend money to people living abroad, whether Spaniards or non-nationals. But it is important to know the ins and outs when borrowing to avoid unpleasant surprises.

First of all, you are going to pay more

Non-residents and Spaniards living abroad will pay higher interest rates than they would if they were resident here. A fixed-rate mortgage, the usual option in this case, around 2.5% for 20 years, and a variable rate, the fixed part added to the Euribor index is between 1.1% and 1.25%. Buyers will have to take out life and home insurance
The reason non-residents pay higher interest rates is because they are buying a second home and will find it harder to meet some conditions that could reduce costs, such as having one’s salary paid into the bank. Fixed-rate mortgages are the most common option right now for non-resident buyers. Banks prefer to give fixed rates so that the amount the purchaser repays is steady. This is one way to offset uncertainty and reduce risk down the road. The usual maximum repayment period for non-residents will depend on the buyers age, but a mortgage up to the age of 75 is not unusual.

You’ll be lent less money

Even though as a rule, a mortgage should not be more than 80% of the value of the property, residents in Spain are sometimes able to borrow up to 100%. In the case of non-residents, the figure tends to fall to a maximum 70%. This is because in the event of non-repayment, the bank’s only guarantee is the property itself.

You’ll have to provide a credit rating

Aside from a tax return, salary payroll, and bank statements, non-residents are usually required to provide a credit rating from their country of origin or residency. The three main credit reporting agencies are Experian, Equifax and Transunion. The origin of all money the buyer puts in to the property has to be accounted for as part of efforts to combat money laundering.

You’ll have to translate all documentation

Not only will any paperwork from outside Spain have to be translated, some banks also require the Hague Apostille, an international authentication comparable to a notarization in domestic law. This can be sent by email to the bank for confirmation, but the contract must be signed by the interested party or by a legal proxy. That said, here on the coast, many of the staff members speak English, French, German, Flemish, and Russian, so banks will accept in-house translation by their own account handlers.
If you’re a non-resident foreigner, you will need a NIE (Foreigner Identification Number) which can be obtained, by appointment from a Spanish embassy or consulate office, or here in Spain.

The obstacles foreigners face

In our experience, we have noticed that banks prefer to work with non-residents from the United States, EU members and Scandinavia, though it’s still possible for banks to work with people from other countries but patience is required. The checks and requirements can seem exhaustive.

Contact us now if you have any questions relating to mortgages or of course property in Spain, we'd love to hear from you on 0034 966 112 773 or email info@ultimatehomes-spain.com

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Penthouse Apartment In Gran Mirador - 85,000 Euros (plus taxes)

We are delighted to offer this modern penthouse apartment with a huge terrace and roof top solarium, with access to a communal swimming pool, outdoor picnic area, and padel tennis court, located in the area of Mutxamel (Muchamiel)  just 15 minutes from the center of Alicante.

View of the complex from the pool

The property is located in a gated complex with beautifully maintained gardens, communal swimming pool, picnic area and padel tennis court. There is vehicle access via electric gates and the property has a private parking space and store room.

Picnic area and gardens

This is a penthouse apartment in a 3 storey block. The road level is on the 1st floor so there is only 1 flight of stairs to the front door of the property. It is a bright and modern apartment with large patio doors from the living room and external, south-west facing windows in both bedrooms.

Living Room leading to terrace

The living room leads to an open, south-east facing terrace of some 30m2. From here there are beautiful views to the sea in the distance and the communal pool to the side. There is also a spiral staircase leading to a roof-top solarium of approximately 50m2.

View from side of terrace

View from terrace

Stairs to roof terrace

The property is 12 years old and built to a good standard. It has double glazed, security windows, fully fitted kitchen, jacuzzi bath and hot and cold air-conditioning throughout.

Fully fitted kitchen

Bathroom with jacuzzi bath

Located on the outskirts of the town of Muchamiel, just 10 minutes from the pretty seaside town of El Campello and only 15 minutes from the centre of Alicante.
Excellent value at just 85,000 euros (plus taxes).

For more information, contact us now on 0034 657 958 094.