Spanish Mortgage Process| Spanish Mortgage Process |
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You may have taken a mortgage before but a Spanish Mortgage has many differences to what you have experienced in the past.
There are five main steps to the Spanish mortgage process:-
Initial Meeting The initial meeting with your mortgage adviser serves a couple of important purposes.
Firstly, you need to know a bit about the person and company that you will be dealing with over the next few weeks.
Your mortgage adviser also needs to assess your personal and financial circumstances, find out your requirements and if there are any special features you need from your Spanish mortgage before they can recommend a mortgage product to suit your needs.
Approval in Principle The next step is to obtain an approval in principle for your Spanish mortgage.
Although Spanish banks typically prefer to receive the full application, most will give an approval in principle. It usually takes around 48 hours to receive an approval in principle and is not a guarantee or mortgage offer, simply an indication based on information you declare.
Easy Mortgages Spain are happy to assess your mortgage application to give you a free preliminary approval based on your financial circumstances to help establish your budget or maximum mortgage lending capacity.
Mortgage Offer Once you have been approved in principle, the next step is to obtain a mortgage offer from the Bank. You will be required to submit documentation to prove your income and financial circumstances.
It´s not uncommon for a Bank to request further documentation to support your application. This can be frustrating sometimes but is normally when someone has circumstances that are not straight forward or when a Bank need to verify some information that a Bank in your own country could do automatically.
Not all Spanish Banks issue a mortgage offer document and may only send an email to your mortgage adviser to confirm the mortgage approval and outline the mortgage terms and conditions. So don´t be surprised by the lack of official Bank documentation.
It usually takes around 5 working days to get a formal mortgage offer, assuming the Bank don´t require any further documentation. The mortgage offer will be valid for 30 days and is subject only to a satisfactory valuation of the property.
Valuation Once your mortgage is formally approved, the next step is to carry out the valuation of the property
The Bank will usually open a Spanish Bank account for you at this point and ask you to transfer some money to that account. It is normal for the Bank to request that you send slightly more than is required for the valuation as the exact cost is not known until after the valuation has been done
The valuation will tell the Bank the open market value of the property, check out the legal status of the property and other due diligence, to confirm that the property is adequate security for the mortgage that are granting you. This normally takes around 5 working days to complete although it can be longer if the property is a finca rustica (property built on rural land).
The Bank will normally send an electronic copy of the valuation report to your mortgage adviser as soon as they receive it. The report will be in Spanish but your mortgage adviser can guide you through the important parts of the report.
Completion Once we have the valuation report back and it is satisfactory for the mortgage, the Bank will be ready to complete.
They will instruct their in house legal department called the “gestorias” to prepare a breakdown of all costs, taxes and fees, this document is called the “provision of funds”
Your mortgage adviser should have already given you an illustration of these anticipated costs so they should not come as a surprise. Costs to set a up a Spanish mortgage are usually around 3% - 3.5% of the mortgage loan and are automatically withheld from the mortgage advance.
The costs are broken down as follows:-
It is then down to your mortgage adviser co-ordinate a convenient completion date with your Lawyer and the Bank at the Notary. Typically, a Bank can prepare completion in around 3 - 4 working days so it is important to give enough notice for your intended completion date.
Altogether, the Spanish mortgage process takes around 3 - 4 weeks from start to finish but can be longer if there are issues with the property valuation or if the clienbt has trouble providng all of the requested documentation quicly.
Easy Mortgages Spain can help you through the entire process as we have done it many times before!
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