REAL ESTATE – FINANCING – MARBELLA WOHNEN – Mortgages for non-residents: buying a house in Spain

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Mortgages for non-residents: buying a house in Spain

Living outside of Spain and buying a home is possible, but you have to know the particularities of mortgages for non-residents

Mortgages for non-residents are intended for those people, foreign or Spanish non-residents, who wish to purchase a home in the country. They are mortgage loans similar to those offered to other buyers who do have residence in Spain, but with particular characteristics. What are the mortgage conditions for non-residents? And who can request it?

Mortgage conditions for non-residents

Generally, the person applying for a non-resident mortgage wants to finance the purchase of a second home. Therefore, the conditions of these mortgages are usually different:

• Capital. The amount of money that the bank lends to finance this type of mortgage is usually less than that of a mortgage for residents. Normally, banks grant mortgages for a maximum of 80% of the purchase or appraisal value of the home for people who live in Spain, while the amount that is financed for non-residents is around 60%. In this sense, it is also taken into account that the percentage allocated to the payment of the fee is not greater than 30% of their income.
• Amortization term. Regarding the repayment terms of the loan, the maximum duration in the mortgage for non-residents is 20 years, while for residents it can be extended up to 30 years. If the non-resident in Spain is a Spanish citizen, it is possible to negotiate the term with better conditions, as long as they have a guarantee or co-owner resident in Spain.
• Interest rates. The home buyer can choose, as in a mortgage for non-residents, between a fixed-rate mortgage (the same monthly installment is paid throughout the loan) or a variable-rate one (which is usually referenced to the Euribor) . Although the interests of mortgages for non-residents are usually higher than those of conventional ones, the future owner can try to reduce the mortgage based on the offer of the bank.
• Currency. According to the Mortgage Law, the mortgage borrower has the right to convert the loan to the foreign currency where he has his main residence or where he receives most of his income. This situation entails assuming risk for banks due to currency fluctuations, which has led some entities to limit themselves to granting mortgages to residents of the eurozone or, alternatively, to countries with stable monetary policies such as the United States, the United Kingdom and Scandinavian countries.
• Documentation. It is necessary to have prepared the documents that the bank needs to know the financial solvency of the buyer. The documentation that must be submitted to apply for the mortgage for non-residents is:
  • Photocopy of the foreigner identity number (NIE) and the passport.
  • Employment contract and certificate from the company with the position, seniority and salary.
  • Recent credit report from the country where you live and work.
  • Bank statement for the last six months.
  • Three last pay slips obtained in the country in which he lives.
  • Statement of income.
  • Six last receipts of pending debts (loans or mortgages).
  • Registration of the assets available in the country of residence (bank balances or properties).
  • Deposit contract, in which an amount is paid on account of the property to be acquired.

Keep in mind that opening a bank account in Spain, although it is not an essential requirement, makes the process much easier when making any deposit or payment.

Mortgage fees and taxes for non-residents

• Expense. By law, when contracting a mortgage, the home buyer must face:
  • Home appraisal. It ranges between 300 and 500 euros.
  • Notary. The buyer must pay for the copies of the mortgage deed, the price of which is between 0.60 and 1 euro for each page.
  • Opening commission. Banking entities usually charge an opening commission that is usually between 0.1% and 2% of the borrowed capital.
• Taxation. Non-resident buyers have to declare in their country the property acquired in Spain. The non-resident buyer must also take into account that, if in the future they decide to sell the property, the Tax Agency will withhold 3% of the value as well as the municipal capital gains.

Contracting a mortgage for non-residents in Spain can be simple, especially if you have the professional advice of an expert from a trusted banking entity, who guides the buyer throughout the process and resolves any doubts that may arise.

Do you want an expert to advise you without any commitment? Let yourself be advised by a specialist.

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