A few developments offer guaranteed rental schemes. This may cover the repayment amount on your mortgage and also provide additional income to cover the maintenance costs as well.
There is a wide range of products available to non-resident clients looking to buy property in Spain. We have access to mortgages from over 15 Spanish and Offshore banks, the choice depends solely on client circumstances, needs and ability to pay.
Low Repayment - Interest Only
- Up to 15 years interest only
- Up to 70% final valuation
- No redemption fees
- Interest charged on daily basis
- Term up to 40 years
- Up to age 80
Low Deposit - 80% valuation
- Up to 80% of final valuation
- Low initial interest rate
“Bridging Loan” for purchase of new property
- Up to 100% value of new property plus costs
- Payment holiday for 1st 3 months
- Interest only for up to the end of the third year if unable to sell old property
- Before end 3rd year pay off debt on old property with no redemption fees
Low Repayment - Self Certification
- Up to 50% of final valuation
- Up to 10 year interest only
- Minimum proof of ability to pay
Self Certification – Self Declaration
- Up to 40% of final valuation
- For individuals who are unable to prove their earnings – self declaration
- Up to age 75
- Term up to 30 years
- Self-signed letter & copy of passport
Low Repayment - Equity Release – Re-mortgaging
- Up to 60% valuation
- Interest only up to 15 years
- Term up to 40 years
- Up to age 80
- No redemption fees
- Equity Release – Re-mortgaging
- Up to 70% valuation
- Interest only for up to 2 years
- Term up to 30 years
- Up to age 75
The products listed above cover a wide spectrum and cater for the client looking to purchase for the first time, those looking to keep payments to a minimum or for those clients who already own a property and want to move but who are finding it difficult to sell. You will also find there are a large number of clients who earn sufficient to cover large monthly repayments but are unable to provide the supporting documentation to the lender; they would be looking to self declare for financing purposes.
Frequently Asked Questions
Q. Am I eligible for a mortgage?
A. The banks in Spain base their decision regarding your ability to repay the mortgage by looking at your net monthly income. Pay slips, tax returns and / or bank current accounts are all required as verification of income amounts. They will normally also require the following documentation. This can vary from lender to lender.
All applicants: Copy of passports, NIE number, bank reference
EMPLOYED:
• Last P60.
• Last 3 months pay slips.
• Last 6 months Bank statements.
• Employer’s reference confirming your role, length of service and current salary or Copy of your employment contract
SELF EMPLOYED:
• Last Self Assessment Tax Return
• Accountants Reference confirming gross and net income, plus drawings last 2 Years
• Bank Statements
COMPANY:
• Incorporation deeds
• Registration documents for Company (if SL Company)
• If in Spain, C.I.F.Number
RETIRED:
• Confirmation letter from Pension provider.
• Last 3 months Bank statements.
• Last Self Assessment Tax Return
Q. I cannot prove my income. Can you still help?
A. We can help you find a loan of up to 50% of the valuation of Spanish property with minimum proof of income. Initially they require a bank reference letter, a copy of your passport and a signed self declaration. Additional information may be required on receipt of all this.
Q. Can I finance 100% of the purchase price?
A. This may be possible but is dependent on the valuation of the property, and is more likely to be possible if you are buying an off-plan property. During the period between agreeing the purchase price and the completion date the value of the property will normally have risen. Some banks will use this final valuation and it may mean that 100% of the purchase price can be funded.
Q. What extra costs are involved in purchasing a property in Spain?
A. To buy a home in Spain with the help of a mortgage, you need to budget about 10-12% of the purchase price as cover for extra costs. Included in these costs are the following:
• Transfer Tax on a resale property
OR IVA (Spanish VAT) on a new build
• Stamp Duty on a new build
• Lawyer fees
• Bank arrangement fee
• Fees: notary, gestoria & land registry fees
• Building insurance
• Broker fees
Q. How long will it take to obtain a mortgage?
A. Based on our experience of Spanish lenders and the mortgage application process, we can normally give a verbal indication within 2-3 days of whether your application is likely to be successful. This is subject to full application, required documentation and a valuation. Once all the paperwork is sent to the bank the full process should take approximately 4-6 weeks.
Q. How do I apply for a mortgage?
A. Please contact us and we will discuss your requirements based on the information you provide to us. We will then be able to make a recommendation based on this information and if acceptable, can then begin the mortgage process.
Q. Can I raise funds to build a property?
A. Yes, you can now raise funds for both the build and the land. As long as you have all the relevant building licences, permissions and architects plans, the lender will advance payment in stages as the building works progress. During this time, you will only pay the interest due on the loan.
Q. Can I raise funding on my existing Spanish property if I own it outright?
A.Yes you can, depending on what you will be using the funding for. You can also re-mortgage if you only have a small mortgage outstanding. However, please remember that as you will be effecting a new mortgage, costs for both cancellation of your existing mortgage and the setting up of the new mortgage will higher than you are accustomed to in the UK (normally about 4%).
Q. Can I raise money to finance the deposit for an Off-plan property?
A mortgage in Spain can only be effected once the property has been completed and registered with the local land registry office. You cannot, therefore, raise the amount for the deposit, at the initial stage, through a loan on that property. Normally, individuals will raise this deposit by either cash they already have or be releasing equity on existing property they own in the UK. However, as the loan on completion can be based on the final valuation, some of this cost may be recouped on completion.
Q. Are mortgages available on properties held in the name of a Company?
A. In theory, you can take out a mortgage on a property held by an SL Spanish Company, an Offshore Company and a UK Company. However, it is a more complicated process than doing it in an individual name. We would be pleased to go through your individual case.
Q. What is the Provision of Funds ?
A. This is a detailed list of all the costs involved in your purchase and you should receive a detailed breakdown of all these costs from your legal adviser before you go to the Notary. Your legal adviser can then give you a full explanation of each cost.
This includes costs the lender must hold by law and includes the following:
• Tax on the mortgage deed
• 5% of the Capital Gains liability of the vendor (in the case of non-residents)
• All fees (notary, registry and gestoria) for both the purchase and mortgage deeds
• Stamp duty (for new properties only)
For current information on mortgages and for help to decide which mortgage is for you please e-mail info@dolphinpropertiesspain.com
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