Spanish property

OUR HANDY GUIDE TO YOUR OVERSEAS MORTGAGE FOR A SPANISH PROPERTY

Spain is one of the most popular European countries for investing in property overseas, for residential purposes and also on a buy-to-let basis.  Spain has year-round sun; you have a choice of beach towns, cities or countryside, and following the unfortunate 2008 economic crisis, the property market is finally experiencing its revival and Spain’s economy is on a steady incline… now is quintessential time to invest in Spanish property!

Whilst some of you might have the cash ready and waiting to purchase your dream Spanish home or investment villa, many people will need to consider expat mortgages and ways of financing property in Spain.

Whether you are looking for property to buy in Spain to live in permanently, purchasing a second Spanish holiday home or adding to a flourishing portfolio of buy-to-let properties, we are going to cover all bases for successfully getting a mortgage in Spain.

If you are undecided on approaching Spanish mortgage lenders or brokers in the UK who work with international mortgages, we would first like to inform you of a few benefits that come with choosing a Spanish mortgage broker for your overseas investment.

  • The Banco de España (The Bank of Spain) authorises all Spanish lenders and the lenders also work subject to the bank’s supervision
  • The connection with The Banco de España is an extra layer of security, firstly because they understand Spain, its finances and its economy, and they carry out due diligence on the property to see if it is worth purchasing
  • Spanish mortgage rates are relatively low in comparison to many countries, even Spanish mortgages for non-residents have extremely reasonable rates
  • Long-term and short-term loans can be agreed when getting a mortgage for a Spanish property
  • Long-term agreements are ideal as expat buy to let mortgages or purchasing a holiday home, whereas short-term loans are beneficial if you are retiring or selling up in England and waiting for your sale to finalise and for a large lump sum to enter your bank

So, you have decided that you want a Spanish lender to act as your expat mortgage broker, but you should first make sure you meet the criteria and that you are eligible for a mortgage to buy abroad.

Each Spanish mortgage lender has different restrictions, requirements and regulations when vetting their clients, but here are some of the basic considerations that can indicate the likelihood of your acceptance:

  • AFFORDABILITY – The most principal requirement is that you have ample income to keep up with monthly repayments. Spanish mortgage brokers calculate affordability based on NET INCOME only, typically only those shown on personal tax returns
  • OUTGOINGS TO A MINIMUM 35% - A general rule of thumb for Spanish mortgage acceptance is that your monthly outgoings and loan or debt payments are kept to a minimum of 35% of your net income. This is to allow for the new monthly mortgage repayments and liabilities such as car finance, bank loans, credit cards, education fees, etc.
  • GOOD PROFESSIONAL PROFILE – You will have a stable, secure career path and will have preferably been in the same job post for 6-12 months if any less you might have to make the lender aware of probationary periods
  • GOOD CREDIT REPORT – What is deemed as an acceptable credit report to one bank may not be good enough for another, so it is best to check this with your specific lender. You can assume all banks will require a good credit score

Property in Spain

Each bank will request different things from their clients, other popular influences on the likelihood of your mortgage acceptance include being from an OECD country, the property has a good resale value, you have a reliable set of guarantors and sufficient money in a savings account.

The value of mortgages granted to Spanish natives and the value of Spanish mortgages for non-residents do differ slightly. As an expat applying for a mortgage for an overseas property you must be ready to accept a slightly lesser loan, potentially at a higher interest rate.

Here are the basics of what you can expect to be granted and what to pay yourself as a British expatriate getting a mortgage in Spain:

  • Non-residential lenders can expect to receive a loan of 70% of the property’s value
  • You will need to invest 45% of your own money into the property after you include the costs associated with buying a property as a non-resident = 15% of the property value –(45% = 100% + 15% purchasing costs – 70% of the mortgage!)

You might be wondering what the required steps are to take when applying for a mortgage for a property abroad. Below are some of the specific actions you should take for those questioning how to get a mortgage for a Spanish property;

  1. Gather together the necessary documents for expat mortgages
    As an expat aiming to be granted a Spanish mortgage, you will be required to present various documentation and paperwork in order to prove to the lender that you are a reliable and honourable recipient for a mortgage for a Spanish property. These required documents include:
    –  Your Passport or Proof of Identification
    –  Your NIE (Número de Identificación de Extranjero) aka. Foreign Resident’s Tax Number
    –  Contract of Employment with your Three Previous Payslips
    –  Overview of any Assets or Debts
    –  Sale Purchase Contract
    –  Land Registry Information of Current Property and its Mortgage
    –  Pensioners Must Prove Annual Income
  2.  You receive an offer when the bank has pre-approval from the risk department 
  3. After client confirmation, the bank opens an account and forwards account details

  4. You must send a property appraisal provision 
  5. A formal property valuation will take place, the bank gets mortgage approval and you receive an official mortgage offer 
  6. The bank will organise official completion with you or a legal representative in Spain

Prior to starting your property hunt, it is wise to get to grips with exactly how much you can afford, factoring in all of the necessary Spanish charges, taxes and extra fee’s. BBVA has formulated a Spanish mortgage calculator, so you know precisely how much it will cost you to finance a specific Spanish property.

Regardless of your budget, Mercer’s Spanish Property has a wide portfolio of Spanish properties to suit all tastes, requirements and wallets. For a selection of some of the finest Spanish properties on the market, browse our site now, or for more specific enquiries, you can call us on +44 (0) 845 0177 805.

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WHERE TO BUY A HOLIDAY HOME IN SPAIN

Buying a holiday home somewhere in the world is a desire of many. You can holiday whenever you want and for as long as you want, which is especially great for retirees hoping to spend half of the year abroad.

Whilst you are away you will feel comfortable, at home, and since your family will only have to pay for flights, it means they can use the money they save on accommodation to come and visit you again and again!

But where do you begin looking? There is no better location for buying a holiday home than Southern Spain.

Buying property in Spain means buying into a country with pleasant temperatures and ample sunshine all year round, so if you want to flee the bleak English winter for six months, you can enjoy averages of 12°C between December and February.  You will also have guaranteed hot weather for all of your summer visits.

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New Costa Calida video launched!

We are really proud of our new Costa Calida / Mazarron / Camposol video.

It has taken us many months to film and edit. The film shows the various fishing villages in the Bay of Mazarron, including La Azohia, Isla Plana, Puerto do Mazarron and Bolnuevo.

We also have interviews with residents of Camposol.

The link to the film is on the bottom of our home page and simply click on the big red button.

Strong Pound = Cheaper Spanish Properties

Mercers are featured in this article taken from Yahoo Finance.

 

Due to a strengthening Pound Sterling, the average property price in Murcia, Spain is now something like 60% cheaper than in 2008.

 

This is due to the property values having fallen by 50% and a 10% weakening of the Euro. All of this add’s up to a buyers paradise in Spain and in Murcia where there are some excellent bargains to be snapped up.

 

The following article explains more:

https://uk.finance.yahoo.com/news/is-now-the-time-to-buy-a-property-in-europe—140647525.html

 

Murcia’s tourism dreams move a step further

They said it would never happen (and it still might not) but the opening of Corvera Airport is imminent and a major cash boost has been promised for the Paramount theme park in Murcia, South-East Spain.

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The long-running linked sagas of Corvera Airport and Paramount theme park in Murcia, Spain, have moved further slow steps towards reaching a happy resolution. Earlier this week Alberto Garre, President of the Region of Murcia said the arrival of the high-speed AVE train and opening of Corvera International Airport “in 2015, if possible, would become reality”. With the theme park meanwhile, the announcement of a €16million EU subsidy had the online forums buzzing. This was later clarified to say it would be paid following construction of the development scheduled to cost the developer, Premursa, in excess of €200 million.  The European Commission said in a statement that the area was “entitled to receive regional development loans,” and “We have arrived at the conclusion that the positive contribution of the measure to favour local development would outweigh the competitive situation created by the private company being given state aid.”

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Chris Mercer, Director of local estate agent Mercers Ltd, said: “Since Murcia was chosen as the location for the Paramount Park back in 2010, the path to realisation has been chequered. Following a symbolic stone-laying ceremony in 2012, and recent small-scale work on access roads and land clearance, the site has been relatively quiet. The focus has been on planning permission, environmental assessment and, most important, attracting foreign investment. Opening dates have been gradually pushed back from 2015 to 2017. Naysayers have had their doubts but a €200-million-plus project in a country emerging from recession was never going to have it easy. At least now the signs are the most positive we have seen for a long time.”  Premursa has also prepared some with impressive websites and promotional videos.

ANALYSIS: GLOBAL PROPERTY PREDICTIONS 2012

Spain is another country where there are bargain prices that are likely to stay affordable during 2012. In parts of Spain you can get a new villa for €50,000. There seems little doubt that for those with the many Spain looks like a good buy in 2012. One area that a lot of people are talking about it Murcia where the new ParamountTheme Park is due to start construction in 2012.

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International Visitors to Murcia up 8.1% – Way Over National Average

ROD153 Camposol Golf 128,000€ Mercers www.spanisproperty.co.ukMurcia greeted 342,054 foreign tourists in the first several months of 2013, up 8.1% on the very same period of time the previous year. 25,589 more visitors have so far picked the region for their holidays in 2013, with all the French and British leading the charge.

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