Arranging a Spanish Mortgage

Spain is one of the most interesting and alluring places to visit. Crystal clear beaches, warm climatic conditions, diverse cultures, streets filled with ancient buildings, wide variety of cuisine and wine - are the specialities of Spain. In addition, Spain is filled with artistic wonders like museums, galleries, medieval castles and ancient monuments. In short, Spain has something for every traveller.

Spain is a perfect blend of art, music, tradition and modernity. A Spanish property is usually artistically very appealing. One can find luxury spa resorts as well as romantic castles and traditional cathedrals. It is a land of contrast and diversity. So naturally there is a huge demand for property for sale in Spain. Financing a Spanish property is easier with the help of Spanish Mortgage. Spanish Mortgage helps you to achieve your dream and own your Spanish property.

• Different Spanish banks operate based on different policies. They also have different risk analysis methods. They vary considerably within the same bank i.e. from branch to branch. So, it is advisable to seek the help of a broker to make the most out of Spanish property and make it a flexible and inexpensive deal.
• It is highly essential to start your bank process well in advance. As you will likely end up in a more expensive rigid Spanish mortgage scheme if you are going to make arrangements at the last minute.
• Mortgage for Spanish property is available based on the value of the property. Mortgage for Spanish property is available for both residents and non-residents of Spain. Generally, a non resident can borrow around 60% of the property value as mortgage while a resident can borrow around 80% of the property value.
• Mortgages are attached to the Spanish property that is bought and written in the title deed. So it is highly recommendable to have a Spanish lawyer during the process.
• Like any other country, Spanish banks provide both fixed rate and variable rate mortgage. Both have advantages and disadvantages over each other. Some banks even offer a mixed mortgage that involves fixed rate for certain period and then, variable rate mortgage for the rest of the period.
• Mortgage for property for sale in Spain is very easy to avail. Spanish mortgage lending period varies from 20 to 30 years on average while mortgage repayments will be less than 35% of your net income.
• A Spanish mortgage lender decides on the amount based on the applicant’s profile, his financial position, age, the type of property he wishes to buy, etc. For instance, Spanish banks consider lending money to buying primary residence property. They consider it as less risky than lending money for buying a holiday home or your property abroad.
• Land registry filing known as ‘nota simple’ is required which will confirm whether the property is clear of any other debts or not. This can be obtained from the Land Registry.
• Approx 1% value of the mortgage is charged as fee.
• Notary fee, Land Registry fee, Deed arrangement fee, Stamp duty - are the other hidden costs incurred while buying a Spanish Property.

Golf property in Spain is known all over the world. So naturally, there is a huge demand for golf property in Spain and luxury Spanish villas for sale. In general, Spanish Mortgage is available for all kinds of properties – right from luxury holiday homes to cheap studio apartment.

Buying a property at the Costa’s

Spain is a land of great lyrical beauty and historical significance. Spain enjoys an all year round warm climate. Its stunning beaches and magnificent mountains attract a lot of tourists. On account of all this, many property buyers choose Spain to buy their second homes or investment properties. At present, the Spanish property market is booming with a lot of foreign investment. Many non-residents choose to buy property in Spain, especially, at the Costa regions of Spain.

Spanish property is one of the favourite investment markets for investors who wish to invest on property abroad. There are several factors which allure investors to buy property in Spain. Some of them include easy availability of Spanish mortgage, world class golf courses, high return on investment, excellent infrastructure, diverse cultural environment and political stability.

Spanish property is attractive to buyers for other reasons also. It is simple and easy to buy property in Spain. Once you decide to buy property in Spain, you have a wide choice of properties to choose from, depending on your needs. Popular Spanish properties: include studio apartments, villas, off-plan Spanish property, resale property, buy-to-let property each having its unique advantage.

Like with any other country’s coastal properties, Spanish property along the coast is obviously in high demand. Costa del Sol, Costa Blanca, Costa de la Luz, Costa Almeria, Costa Calida and Costa Tropical are some of the hot spots in Spain where you can find skilfully designed properties. These coastal properties have huge demand from tourists because of the warm climate, diverse culture and long inviting beaches in the region. Investment property in Spain is of great value if it is present along the country’s fascinating coastline.

The market prices of these properties remain favourable in coastal areas in spite of its warm climate and high demand from tourists. Spanish Property along the coast ranges from cheap studio apartments to million pounds luxury coastal villas. Different coastal areas of Spain have different specialities for people. The Properties found in coastal areas differ from inland properties. One can choose coastal property according to his need.

Investment on property in Spain can be made on both Resale and Off-plan Spanish property. Many investors who wish to buy property abroad wish to invest on off-plan Spanish property due to the following reasons:

• Early purchases offer good price
• Good return on investment
• Market price increases as property develops
• Regular source of income as rent

Spanish Mortgage is available for both resident and non residents. It is important to prove your credentials to claim mortgages like the following: last 3 moths pay slip if self employed; last 6 months bank statements; copy of your passport; tax declaration document, etc. However, the documents required may vary from a resident to non-resident. Most importantly, in order to make investment on property in Spain, one requires an ID called NIE (Numero de Identificación para Extranjeros). The maximum amount that can be claimed by a non resident is 80% of the property value. However, for a resident it is 100% of the property value. It takes an average of 2-6 weeks time to arrange for the mortgage.

Spain is an enchanting place for the tourists. Its Coastal properties attract lot of foreign investment from non residents. In a nutshell, it is a wonderful place to buy property abroad.

BUYING PROPERTY IN SPAIN:

Spain, located in the southwest of Europe is an enchanting place filled with sunshine fields, fantastic beaches, beautiful cities and towns full of architectural wonders and rich cultures. On account of all this idyllic beauties, it is one of the favorite destinations for investors. Investment property in Spain is a growing trend amongst many foreigners and non-residents. Buying property in Spain is favored because the price rates are relatively lesser in many regions in Spain than in other countries.

The market values of the properties are also continuously increasing and investment property in Spain is a remarkable business venture. Mortgages for buying property in Spain are easily available. Investment in Spanish property offers a regular return on investment for investors.

Real estate in Spain is a thriving business that brings a lot of foreign investments. It is a booming business which includes buying, selling and renting out properties. All kinds of property - off plan, resale, buy-to-let, and leaseback - are available for sale in Spain. Off plan property, buy to let property are some of the popular kinds of properties for sale in Spain as they serve as good long term investments and a great source for regular income. However, Property for sale in Spain has to be thoroughly investigated before purchasing.

The processes involved in buying a property in Spain:

• Reservation fee has to be paid once a property is chosen for purchase. This helps in freezing the price of the property. This amount will be deducted from the deposit.
• Buying property abroad requires an NIE number for foreign investors to carry out any financial transactions with regard to buying investment property in Spain.
• Rules and procedures differ from town to town and hence it is always better to handle them with the help of a legal estate agent.
• It is advisable to have a legal advisor or lawyer to assist you while buying property in Spain.
• The lawyer can help in verifying the property documents, check for any mortgage pending, and other legal aspects thereby making your investment property in Spain a hassle-free one.
• A contract is drawn between the buyer and seller with all details such as price, payment date, for ownership transfer and other legal aspects. It has to be drawn with the help of the lawyer to check all the rights and obligations of both parties.
• While buying property in Spain, 10% to 30% of the property amount has to be paid as an initial deposit.
• Payments are based on the terms and conditions stated in the contract.
• At the completion of the payment, the title deed is transferred to the buyer by the seller.
• Hidden costs such as registration fee, lawyers fee, notary fees, stamp duty, Insurance and others has to be carefully included while calculating the investment amount.

Finance for investment property in Spain can be got easily from the help of Spanish mortgages. Mortgage is available up to 80% of the property value. The NIE number is required to claim mortgage in the bank. Many banks have branches in most of the countries in Europe, Australia and Canada and readily offer loan to non residents. Some banks even lend loan based on their properties back at home. In short, investment on property in Spain is one of the smartest ways to invest in real estate.

OFF PLAN PROPERTY VERSUS RESALE PROPERTY IN SPAIN

Spain is a great country with a good mix of fine weather, rich culture and idyllic beauty. No wonder that there is an increase in demand for property in Spain by foreign investors. There is a good demand for both off plan Spanish property and resale properties which include apartments, studios and villas for sale. So, if you are looking to buy property abroad, Spain can match your holiday and investment principles.

The main difference between Off Plan property and Resale property lies in ownership and issues regarding property, its completion and sale. If a buyer is provided with only a property plan and the property is sold even before construction, then it is said to be an off plan property. Off plan property in Spain is referred to as a new development. The finished property will only be a replica of the property plan. In today’s market most of the investment properties in Spain are sold even before the completion of construction. A resale property is one which is sold one or more times. An off plan property in Spain would be sold primarily by the property developers while resale property is sold by owners or agents.

When selling an off plan Spanish property, the developer’s initial interest would be in selling as many properties as possible in the new development. The greater the number of properties sold, the lesser the need to generate funds for developing the property. So, in the beginning the developer sets the price below the market price. However, during the construction process the price of the building might go higher than the market price. In the case of a resale property in Spain, price would be a fixed one or will be negotiated between the buyer and the seller. A contract has to be signed for off plan Spanish properties before the construction is completed. It is highly recommended to have a legal advisor during the process. A smaller deposit is made during the initial signing off while the remaining money is paid at the completion of the project.

On the other hand, in a resale property, one exactly knows what they are investing in. One has to have his cash ready if he wishes to invest in resale property in Spain as 10% of the price is placed as a deposit while the remaining 90% of the price is settled when the title deed is transferred. A thorough inspection has to be made before buying a resale property in Spain as sometimes modernization or renovation expenditure might cost you more than that of a new building.

When buying an off plan property in Spain, some developers help buyers in getting mortgage at banks. But in case of a resale property, the buyer has to arrange for finance on his own. The VAT for a new development is slightly higher than the transfer tax of resale property.

But as a buyer, you have to be very careful about the laws and regulations of the region. A Spanish lawyer who can speak your own language is highly recommended for both kinds of investment. The legal advisor can run a background check on the property, check for authentication of the title deed and other legal documents. Spanish mortgage is available for both new and resale properties. The mortgage amount depends on the value of the property. For instance, if it is a villa for sale in Spain, then its amount will be judged by its value and the general property market trends at that particular time. NIE number is the tax number that is required to buy a property in Spain.

In spite of these advantages, the annual investment on property in Spain has been decreasing for the past few years. The Spanish property inflation rates have been falling since 2003.

Postings coming soon...

Are buying a property in Spain? Do you plan to move to Spain permanently or are you looking for a second home or investment property in Spain. Starting the first of December 2007 we will have a monthly post, full of tips and tricks when buying Spanish property.