1) If I purchase a mortgage in Spain, will I need life insurance or some other type of cover?
In Spain it is not necessary to have life insurance when acquiring a mortgage although it certainly never hurts to acquire some form of life cover to protect your family in the event of an unforeseen event.
2) How long does it take to get a mortgage in Spain?
The length of time the Spanish mortgage process takes is a variable dependent on many factors. The general rule of thumb is that a mortgage application life span is normally completed within 28 days, although in certain cases this can be extended to take circumstances into account. Mortgage brokers in Spain usually will try to complete the application in as short a timeframe as possible.
3) What is the cost of arranging a home loan in Spain?
The commission charged by a Spanish mortgage broker can vary but to ensure you are with a reputable broker you should aim to be paying between 1% - 1.5% of the value of the monies advanced from the mortgage lender.
4) If I decide to pay off my Spanish mortgage early, what will it cost me?
This is an important question as it can often decide the choice of lender you will make. Each mortgage lender in Spain has different criteria relating to this. Some lenders will charge you only if you repay the mortgage in the first 5 years, others will charge you nothing. The most common case is you will pay around 1% of the amount advanced for early repayment of the mortgage.
5) What is the interest rate in Spain for mortgages?
In Spain, the interest rate is called the EURIBOR, which is normally around 3.5%. It is however based on the European Central Banks's base rate and is therefore subject to change. If you would like to know about rate changes during the lifetime of your mortgage then you should keep on eye on the European base rate. This will then be reflected in the Spanish mortgage interest rate.
6) Who will represent me in the application, will I need to hire a Spanish lawyer?
The Spanish mortgage process is complicated and requires a thorough knowledge of the banking and notary system to ensure a clean and correct application is being filed and will be approved. Hiring a Spanish lawyer who has good English can be very important to your application as they will know far more than you about the process. Another advantage of having a good Spanish lawyer is they will have the power of attorney to sign documents on your behalf at the notary, especially useful if you are a property investor and can not be in the country at the time.
We hope you found this section on Spanish mortgage frequently asked questions helpful and informative. We aim to add more questions and answers to this section over time as we encounter more questions from you our visitors. If you have a question about mortgages in Spain that you would like answered then please get in touch with us and our Spanish mortgage experts will be only too happy to help.
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