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Mortgages

Spanish Lending Criteria
Type of loan
Repayment or interest-only finance is available for the purchase or remortgage of Spanish property. Capital raising is also possible. DSP can help arrange Spanish mortgages for mainland Spain, the Canaries and Balearics.
Purchaser
Purchasers can be individuals or companies.
Loan size
The minimum loan size on a Spanish mortgage is €150,000. There is no maximum but it must not exceed 70% of the mortgage valuation or purchase price (whichever is lower).
Term
5 to 30 years up to age 75.
Fees
Spanish bank fees vary but are typically 1% of the mortgage amount. You should allow at least €500 for the Spanish mortgage valuation; stamp duty of 1.8% of the mortgage amount; and notary and registration fees of around 1% of the amount borrowed.
Lending criteria 
Understand Spanish mortgage lending criteria with DSP.
Lenders will only provide mortgages on property registered as “Urbana”.  This means that Rural / Rustica properties and old farm houses are unlikely to be acceptable forms of security for a mortgage
Lenders determine how much you can borrow by taking into account your financial situation and the value of the Spanish property.
Most Spanish lenders take into account your existing UK liabilities, including mortgage/rent payments, personal and bank loans, and maintenance payments. When these are added to your proposed Spanish mortgage payments, the total must not exceed 35% (this percentage can vary) of your net monthly income. For example, if your UK mortgage is £200 a month, car loan £50 a month and the proposed Spanish mortgage is £250 a month, your net monthly pay needs to be at least £1,430 or your application will not be successful. N.B different criteria apply when you are self-employed and you should discuss this with your consultant.
Spanish lenders require proof of income. This can be earned income, pension, investment or rental income. However, not all lenders take all of these into account.
SPF has exclusive arrangements with a number of Spanish lenders, offering minimal and bespoke underwriting terms and conditions on Spanish mortgages.
Insurance
Spanish property insurance advice from DSP.
Buildings insurance on Spanish property is compulsory. Most Spanish lenders don’t require you to take out life or critical illness cover but DSP can provide independent advice for all your insurance needs when buying property abroad.
Valuation
Understand Spanish property valuations and their bearing on mortgage loan amounts.
Loans are available up to 70% of the mortgage valuation: this is not the same as a market valuation. The transaction values of at least six similar properties sold in the area in the preceding six months are usually taken, with the valuer deriving an average price per square metre. This figure is then multiplied by the size of the Spanish property you are purchasing to arrive at your valuation.
The nota simple, an abbreviated form of the escritura de compraventa – the official document recording the transfer of ownership from the vendor to you – is provided by your legal representative or land registry. This document may be required before a valuation can be carried out.
Legal issues 
Spanish property laws and legislation.
Do not sign anything until you have taken legal advice and don’t put a deposit down on a Spanish property before ensuring that it is refundable. You should also check what legal costs and government taxes you are liable for before committing yourself to a purchase or remortgage in Spain.
DSP endeavours to secure the loan on your Spanish property within your preferred timescales but delays may occur as a result of the Spanish legal and banking system.
Completion
Spanish mortgage loan completion information.
In order to complete on your property in Spain, both buyer and seller must sign the escritura de compraventa in front of the notary. The seller will hand over the keys and you will become the official and legal owner of a Spanish property. Congratulations!
Apply for a mortgage 
Applying for a mortgage to buy a property in Spain.
It is advisable to arrange a mortgage in principle before committing to a purchase. This will enable you to find out how much you can borrow, so you don’t waste time looking at Spanish properties beyond your budget. Even if you haven’t found a property in Spain yet, the DSP international team can help you establish your affordability and issue an approval in principle based on your financial situation.
If you have already found a Spanish property, DSP will send you a mortgage application pack.
Should you require funds to put towards a deposit, or if you don’t qualify for a Spanish mortgage, we may be able to help raise finance for your proposed property in Spain.
Contact DSP on 0844 854 7052 or email info@discountedspanishproperty.com

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