Our firm works in collaboration with a number of local and international banks, and assists clients in obtaining financing for the purchase or development of a property or project.
In addition, we advise clients in raising bank financing for the construction of new properties and other property developments.
Spanish Banks generally lend non-residents up to a maximum of 70% of the property's value by means of a loan, and for a maximum of 30 year term mortgage, subject to the age of the applicants.
Banks also offer the possibility of awarding mortgages involving the repayment of interest only (and no principal) for the first few years, which is usually of great help for new buyers which find themselves with too many outgoing expenses in connection with the purchase of a new property in Spain.
Applying for a mortgage entails furnishing the lending bank with documentation, which provides proof of income, disclosure of assets, bank references and credit history, which serves the basis that the bank will use in determining the maximum amount of the loan to the buyer. Secondly, the bank will request from an independent third party a valuation of the property and finally issue a formal offer on the terms of the loan. A mortgage can take approximately 3 weeks to be formalized once all solvency documentation has been furnished to the bank.
The costs involved in taking out a mortgage in Spain include the following:
- A bank opening commission fee (generally around 1%).
- 1,5% Stamp duty tax based on the total mortgage liability (principal, interests, costs and expenses). Generally this is approximately 1.8% of the total mortgage capital.
- Valuation Fee (amount depends on value of the property).
- Registration costs (Notary, Registry & Management fees).