Mortgages

Administration and Finance before buying

A mortgage abroad or from the UK

Before you step onto the property ladder you'll need to arrange the following:

Finance

Mortgages

You can choose to apply for a mortgage abroad or from the UK. Mortgage rates in Spain tend to be lower than those in the UK. You know the price of the property in Euros but you will not know the actual cost until you buy all of the currency to pay for it. This means that the property could either cost you more than you had planned (if the Euro strengthens) or the property could become cheaper (if Sterling strengthens).

Two levels of mortgage offered

There are generally two levels of mortgage offered, one for residents and one for non-residents. For non-residents the mortgage offered is generally around 60% of the declared value, for residents it is usually around 80% of the declared value of the property.

A mortgage in Spain

Applying for a mortgage in Spain is a straightforward process, as in the UK. You will need to prove that you have an income or sufficient funds to pay the mortgage. The level of mortgage offered is directly dependent on your financial status and also the declared value of the property you wish to purchase.

A number of documents must be furnished to the Spanish bank in order to accommodate a smooth transaction. Please note that originals of everything will need to be shown and copies will be taken at the bank.
Passports, driving licenses
If employed: last three months payslips, latest P60's.
If self employed: last three years audited accounts, tax returns and accountants reference.

NIE number (Numero de Identificacion de Extranjeros)
This is the fiscal identity number and is essential to have for any financial dealings you may have in Spain. This can take a few weeks to obtain, so plan ahead. It involves filling in a form with your solicitor and you also need to supply a colour 'passport' photo, a photocopy of your passport and your passport. The solicitor will then obtain your NIE number from the local police station.

Banks
You need to set up a bank account if you want your home running costs dealt with through direct debit. Choose your Spanish bank carefully as running costs vary considerably between banks. A name you recognise from your high street will probably have no relationship with a bank with the same name in the UK. Find out from the UK bank if they have a relationship with any Spanish banks.

Becoming a Resident
If you wish to spend more than six months in Spain you need to apply for a Residencia - to become a Resident. Being a resident does not restrict movements in any way and it has many advantages i.e. lower taxes. If you don't become a Resident, you must appoint a fiscal representative.

A Spanish Will
Property in Spain is subject to Spanish laws, so it is strongly advised that you make a Spanish will, which costs approximately 200 euro. Your solicitor should be able to advice you on this point.

Fiscal Representative
It is highly advisable for any person who has a property in Spain but does not live there all the time to nominate a "fiscal representative". This is a person to whom the tax authorities can send all correspondence relating to your affairs in Spain, secure in the knowledge that it will arrive. The fiscal representative must be resident in Spain, but it is for you to choose whom to appoint. It can either be a friend, a neighbour, a lawyer, or your tax adviser.

Gestor
For facility management you can appoint a local 'Gestor'. This person is like the official form filler who does the work for quite reasonable charges. If you decide to live or work in Spain your legal representative or Gestor can assist you with "residencias", work permits, licences and permits in connection with the opening of new businesses. They will also advise on importing cars, furniture and electrical goods, and pets into Spain, obtaining payment of your pension in Spain, national insurance and other related matters.