Complete Guide to Financing Your Property in Spain with GestaliHome

At GestaliHome, we understand that financing a property can be a complex task, especially for those unfamiliar with the Spanish real estate market. That's why we work closely with trusted financial intermediaries who have experience in the sector and can help you find the best financing option for your particular situation.

In this article, we highlight the key aspects you need to consider when financing your property:

1. Know Your Budget:

When applying for a loan to buy a property in Spain, it's crucial to have your own funds covering between 40% and 50% of the property's value. This is because you will need to cover at least 30% of the property's value as a down payment, plus associated costs which are around 13% (taxes and other expenses).

If you want more information about the associated costs, we invite you to read our article: "The Costs Associated with Buying a Property in Spain: What You Need to Know Before Acquiring Your New Home."

2. Debt-to-Income Ratio:

This ratio indicates what percentage of your monthly income is allocated to debt payments, including the mortgage loan installment and any other loans you may have. Banks usually set a prudent limit: the total value of these installments should not exceed 35% of your monthly income.

3. Plan Your Age at Loan Completion:

Keep in mind that the maximum age for most mortgage loans is 72 years at the end of the loan term. This means that the final loan installment should be scheduled so that it does not exceed that age.

4. Consider Factors That Improve Your Credit Score:

Banks favor those with a solid credit history, meaning people who have shown responsibility in managing their previous debts. Those who demonstrate stable employment history and consistent income are perceived as less risky by banks.

In addition to the factors mentioned above, having more than one applicant on the loan can be beneficial. If you have a co-borrower with a solid credit history, this can strengthen the loan application and improve the chances of approval. Also, maintaining a low credit utilization rate, meaning not using a large portion of the available credit limit on your credit cards, can indicate financial responsibility and positively contribute to your credit score.

5. Work with Trusted Professionals:

At GestaliHome, we can recommend trusted financial institutions and mortgage advisors with experience in the Spanish real estate market. These experts can advise you on the different financial products available and help you find the option that best suits your specific needs and circumstances.

Bonus Track: Frequently Asked Questions

Is it possible to get a mortgage in Spain as a foreigner?

Yes, whether you are a resident or not, you can apply for a mortgage in Spain to buy a property in the country. Many Spanish banks are willing to offer financing to foreigners, although conditions and requirements may vary depending on the bank and your personal situation. It's important to note that in many cases, the more applicants there are on the mortgage application (for example, if you are married or have a co-applicant), the easier it can be to obtain loan approval. This is because the bank can consider the income and assets of all applicants when assessing payment capacity and creditworthiness.

Can I include taxes and costs in the mortgage?

No, the mortgage is based solely on the value of the property and does not include taxes or additional costs. You should consider these additional expenses when calculating your total purchase budget. Some of the additional costs to consider include transfer taxes, legal fees, and notary expenses.

How long does the mortgage application process take?

The entire process, from application to final approval, can take between 4 and 6 weeks. During this time, the bank may require additional documentation and conduct risk assessments before granting final approval.

Should I choose a mortgage in euros or another currency?

It is advisable to opt for a mortgage in the same currency as the purchase price of the property. This will help avoid potential losses due to exchange rate fluctuations. If you are receiving income in a currency different from the loan, consider the associated exchange rate risks.

Contact:

Phones: +34 604 22 57 09

Email: [email protected]

Office: Plaza Músico Óscar Tordera Iñesta 11, 03004, Alicante, Spain