Spanish Mortgages.

by : Ruth Polak

In the past it was generally assumed that people had thecash to do so. However that has changed in recent years as many peopleare buying homes because they live and work permanently in Spain orbecause they see it as a good investment. Spanish banks (bancos) andsavings banks( caja de ahorras or caixa in Catalán) too have changed in recent years and are now much more amenable to givingSpanish mortgages to foreigners so it is certainly something toconsider if you are intending to buy property in Spain.

One of the main advantages of a Spanish mortgage over a U.K. one, forinstance, is that generally speaking the interest rates are quite a bit lower with different Spanish banks having different offers so it is certainly worth shopping around. A good idea is to ask the bank for a copy of their Spanish mortgageoffer then take this to a different bank and ask them if they can betterit- they often will. Then it is worth taken the improved Spanish mortgage offer back to the original bank and you may well get a pleasantsurprise, Spanish banks seem to be much more flexible than their U.K. counterpartsand the competition between them is fierce.

The other advantage of a Spanish mortgageis the fact that the banks and their bank managers are familiar with theprocess of property purchase in Spain and can therefore guide you through the procedure more simply and smoothly than perhaps a foreign bank can.

As with the U.K. to qualify for a Spanish mortgage you will of coursehave to be able to prove your income.

You will need to produce wage slipsfor the last 3 months and bank statements for the last 6. The self-employed will need audited accounts going back three years plus copies of 12 months business bank statements.

For those buying to let be warned, a Spanish bank will not give a mortgagebased on projected income from rentals.

Spanish mortgages are generally 60-80% of the property value repaid over 5,10,15 or 20 years although some banks will offer 100%. The currentvariable rate for a Spanish mortgage is 4.7% which compares very favourably with what U.K. high street banks and building societies are currently offering. The repayments should not exceed 35%of your net monthly income.

The recent building boom in Spain has resulted in Spanish mortgages now being readily available and Spanish banks are keen to do business with foreigners.

Many of them, particularly in the more touristy areas, employ Englishand German speaking staff and I think if you are applying for a Spanishmortgage you will be pleasantly surprised at the reception you receiveand the helpfulness of the bank staff.