Mortgage

The last decades there has been an increase in the amount of properties bought by foreign citizens on the Costa Blanca. As a result of this and a general relatively high increase in real estate prices the demand for mortgages has reached levels never seen before in Spain. Spanish banks have in general very strict lending laws and is struggling to offer the product required by foreign investors. The banks on the Costa Blanca all want to take part of the foreign investors market but in many situations what they offer and their fees is way over what a foreigner is used to get in his/her home country.This leads to that some foreign investors tend to seek their mortgage through international banks or banks in their home country. Possibilities are their through offshore lenders or mortgage their home in the UK for buying their second home in Spain.

Many property investors on the Costa Blanca do end up taking out mortgages in Spanish banks. For a resident in Spain a normal Spanish bank would give up to 80% of the valuation of the property. This valuation is set by the banks valuer. The level of the valuation will depend on the valuer and in some cases the property have different value with different valuer but the last few years they seem to be more updated and the value normally comes out more or less to the market value. If you are a non resident in Spain and buying a property on the Costa Blanca a Spanish bank would normally give you up to 70% of the value of the property in mortgage. The valuation has a fee that the customer will have to pay. The fee depend on the bank but would be aprox. Around 280 euro per valuation. The valuation will include location of the property, construction material, repairs, square meters of land and construction.

Even thought the Spanish banks are struggling to be able to offer competitive mortgages they are improving especially their customer attention with employing English or English speaking staff in their branch offices.

After you agree with the bank on the terms of the mortgage the mortgage will have to be signed at the public Notary. The Notary will require some documents from the register of properties in Spain but the bank giving the mortgage will take care of the paperwork and make sure the property is sold without any other mortgages or liens. If you buy a property in a community you should check with the community if there are any outstanding payments due. This counts also for the electricity and water supply company. This would normally be done buy your solicitor or the real estate company that works as the intermediate. But you should ask anyways.

The Spanish bank will have all the paperwork including registering the property in your name done by a Gestor who will charge you a fee for doing the work. There are many fees when buying a property in Spain and to simplify it you should calculate a 10% on top of the price you are paying for the property to include them all.

To get a mortgage with a Spanish bank you are also forced to get an insurance for the property. ( You would want to do that anyway so it does not really matter ) In addition to the insurance for the property you should advise the bank/ insurance company to include contents.

In most cases you will also be required by the mortgages lender to take out a life insurance to cover the mortgage in the case of death.

When choosing which mortgage lender to choose for your new home on the Costa Blanca you should ask for all the details and set up fees that they will charge you. There are also fees when cancelling the mortgage partly or fully. It is important that you take everything in consideration because if you should want to change the mortgage or change the bank you have the mortgage with during the mortgage period there are large fees involved which makes it seldom wise to go ahead with the change. Getting a mortgage in Spain is almost a lifetime commitment.