Mortgages on Costa del Sol Properties.
Mortgages are available for all types of property and land on Costa del Sol. 
Who offers mortgages ?
Mortgages are available from most of the major Spanish banks and savings banks [Caja], International banks and lenders in Gibraltar.
Many new apartments, townhouses and villas under construction on the Costa del Sol are already mortgaged by the developer as a means to raise capital to fund the construction and or for the convenience of the purchaser.
A purchaser can take over such a mortgage when purchasing such a property and by negotiation with the bank holding the mortgage increase the amount of the mortgage loan inline with the increased value over the construction period.
This is probably the cheapest way for an individual to obtain a mortgage, as the setup costs will have already been paid by the developer.
Sometimes resale properties are also offered for sale with a mortgage in place, an Independent Mortgage Broker should check out the terms and conditions applying to the existing mortgage loan before you consider taking it over.
Important Note:   Mortgages in Spain are attached to the property, not to the person who takes out the mortgage loan and are written into the escritura [Title Deed] of a property, which is just one of many good reasons why you should always use an independent abogado [Spanish lawyer] before purchasing!
For more information see Costa del Sol Property Buyers Guide

Which lender should I choose?
Spanish national and regional banks are generally the best option, but because of the many variables that need to be considered, not least being the location and type of property, banks current special offers and the terms and conditions.
As part of the free service we provide for our clients a Qualified and UK regulated
Independent Mortgage Advisor and Strategist is able to advise you on the most suitable mortgage lender for your situation, bringing the mortgage on your Spanish or UK property to a successful conclusion.
WARNING! Many mortgage brokers and advisors in Spain, [and the vast majority of estate agents, including the largest companies] are not licensed, qualified or have and regulatory control because it is not a legal requirement, we advise you to only work with mortgage brokers and estate agents who are qualified, licensed and regulated in conjunction with an Independent abogado, it's your money, why risk it or pay over the odds?

What is the cost of arranging a mortgage?  
Unless you are purchasing a property with a mortgage already in place [see above] the cost to arrange a mortgage will be no more than 1% of the amount advanced.
Apart from the valuation fee from around 200 euro, you will have to pay the notary costs, taxes, property registration and legal fees of the lender, these should all be itimised on your mortgage offer, and they will be paid by the bank on your behalf.
You will also be required to take out building insurance and possibly life insurance to cover the amount of the mortgage loan, you can take either straight life insurance, or an endowment style policy with the appropriate life insurance attached, which will give you a cash lump sum when the policy matures.

How much can I borrow?
As a general guide a non resident will be able to easily borrow up to 75% of the banks valuation of a property, residents can easily borrow up to 80% of the valuation, higher percentages, fixed rate, and none status mortgages are available, the key to obtaining the maximum mortgage offer, is in achieving the maximum valuation, which is the job of the Tasador [valuer] There are independent tasadors, some banks will accept valuations from a variety of companies, others have their own tasador, but the resulting valuations can vary considerably, an Independent Mortgage Advisor is invaluable if you wish to achieve the maximum load at the lowest rates.
You can normally borrow up to 3 times your gross annual income, but generally the monthly repayment should not exceed 30% of your net disposable income.
On freehold commercial premises 60% is generally available.
On purchases of land the maximum will generally be around 60% of the valuation, which also applies to county houses constructed on land classified as "rustic"
On land which you own outright, an approved architects project, with the building license paid, can be mortgaged at up to 60% of the valuation of the completed project [construction and land]. This figure is more than sufficient to cover 100% of the building costs of normal residential construction. Lenders will not finance construction on land that already has a mortgage attached.

Which Currency should I borrow in?
Mortgages are available in all major currencies. You should be aware that if you borrow in a currency which does not have a fixed value against the euro, currency fluctuations could make your borrowing more expensive, or less expensive depending on whether your chosen currency weakens or strengthens against the euro.

What Interest rate will I pay?
Interest rates will again depend on the currency you choose to borrow. Interest rates for mortgages in euros are based on the Euro Interbank Offered Rate, or EURIBOR for short, which has largely taken over from the older MIBOR, the current EURIBOR rate is around 2%. for the latest rates click on Euribor
The lenders rate will be a margin over EURIBOR generally EURIBOR + 0.5% to 1% but individuals circumstances can dictate higher or lower rates.
Fixed rate mortgages are available at slightly higher interest rates
Some lenders offer a lower Start up interest rates of for the first year or interest only mortgages ideally suited for funding new construction.

How often will interest rates be reviewed?
Usually once a year
What is the maximum repayment period?
Most commonly 10, 15 or 20 years, but up to 35 years can be arranged
What will the repayments be?

What is the cost of early repayment of the mortgage?
From zero to 1% depending on the terms of the loan, some lenders only charge for cancellation only in the first 5 years, others make no charge at all, it is important to choose the your lender carefully if you are considering an early repayment option.

What information will the bank require?
Banks vary in the amount of information that they will require, it is wise to prepare as much of the below as possible in advance.
If you are employed:   Last 3 wage / salary slips.
Last Income tax declaration [P-60 in the UK] or evidence of latest annual tax assessment.
Copies of current bank statements.
Bank reference letter from your employer confirming date of employment and proof of income. [not always essential but helpful, especially if you want to achieve the highest possible percentage]
Copy of passport / residencia
If you are self employed:  
Latest income tax declaration.
Copies of the accounts for the last 2 / 3 years
Chartered accountants company report, confirming your annual personal drawings from the company
Copy of your passport / residencia
Personal bank statements.
Bank reference letter
You will also need:
In relation to a specific property, the nota simple from the property registry, offer letter or sales purchase contract, we will provide the relevant document
NIE number from the local police station, which we or your lawyer can arrange.
You will also need to open a Spanish bank account, which we can also help you with.
Note:
Bank charges for maintaining an account, and commissions for transferring money the account vary considerably, some provide good online banking, which is useful to check if the bills have been paid in your absence and transferring funds with zero commission.

Any questions?
Our Independent Mortgage Advisor has over 20 years experience in banking and financial services.
Having forged relationships with over 30 lending institutions, UK Banks, 30 Spanish banks, Gibraltar and other offshore Banks, he is able to apply high levels of service and efficiency to securing the finance requirements for our clients.

He offers a free initial consultation through which he will be able to source the most suitable and competitive financing arrangements for our clients individual circumstances.
Liaising directly with the lender, lawyer and valuation company to ensure a seamless service right up to completion.

Leading Independent Mortgage Strategist
Qualifications Full FPC, CeMap, LLB [Hons]to UK regulatory standards
Residential Mortgages, non Residential Mortgages.
Commercial, Project and Development Finance
Access to UK banks, Spanish Banks, Offshore Banks and Private Lenders
UK Mortgages provided through FSA regulated firm
Self Certification
100% Funding
Foreign Exchange Services.
If you need any information or have any questions please ask.
E-mail us at mortgages@property-spain.com

This mortgage guide is published by the Costa del Sol Property Index S.L. we are independent licensed consultants, please read in conjunction with our comprehensive buyers guide to safely purchasing, the costs involved in purchasing, owning and selling a property in Spain.

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