3.5. Banking and mortgages
Banking and mortgages in Spain
Banking and getting a mortgage in Spain has becoming increasingly accessible to foreign property buyers as the Spanish government strives to make it easier and more attractive for foreign investors to buy property in Spain. Getting a mortgage through a Spanish bank has its advantages, Spanish banks offer lower interest rates and favourable write off conditions, there are no expensive bank commissions from international bank transactions and it is easier to sort the taxes out.
For loans and mortgages in Spain you can work with either your bank, a mortgage broker or your real estate agency. Spanish banks will lend on average between 60-70% to non resident home buyers, and more to residents. The mortgage broker and the real estate agency essentially offer the same service. They will provide you with advice on which lenders to speak to and can liase between you and the lender, offering an idea on quotes and help with the language barrier.
Look for a bank with English speaking staff, personalised customer service and low interest rates as well as efficient online banking. The bank will have the property valued (by the Tasador) and you will be required to take out life insurance cover and building insurance with an insurer of the banks choice. You will be asked to supply pay slips or accounts details and tax declarations from your country of residence.
Significant IMF involvement in the Spanish banking system since the 2008 economic crash however has seen mortgage lending drop and regulations become much stricter. Mortgage lenders will only complete a mortgage agreement once you own the property, therefore, make sure you have your lawyer add an exit clause to the purchase contract whereby you can exit the agreement if the mortgage falls through.
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