How to avoid 3 common mistakes when applying for a Spanish mortgage

Buying a property in Spain is very exciting, but it comes with challenges, especially if you're accessing a mortgage as a non-resident. From language barriers to unfamiliar banking processes, the home-buying journey can become overwhelming. 

In this article, we’re going to talk about three big mistakes to keep away from if you’re trying to get a Spanish mortgage from another country.

How easy is it to apply for a Spanish mortgage as a non-resident?

Obtaining a mortgage in Spain as a non-resident can be more complex than for residents. It's key to grasp this complexity and have realistic expectations from the beginning.

But it’s not impossible. In 2022, foreigners acquired over 30,000 mortgages in Spain, demonstrating that one-third of international buyers successfully managed the mortgage application process last year. This means lots of people like you did it.

The right help can make it possible for you too. Let’s begin by identifying mistakes you should avoid when seeking financing.

3 common mistakes to avoid when applying for a Spanish mortgage from abroad

It's normal not to know everything about applying for a mortgage, especially for non-residents looking to get a loan in Spain from abroad. It's important to thoroughly understand the process to make sure you don't overlook important information.

Here are the big mistakes you can dodge:

1. Skipping professional advice

It's tempting to assume that you can manage everything on your own, and you probably can, but don't underestimate the value of professional assistance available to you. 

Real estate agents, lawyers, and mortgage brokers know the ins and outs of Spain's property market and legal requirements. They can help prepare what you need, clarify how the system works, and set the right expectations.

For instance, a mortgage broker can speed up the process and even get you better deals from banks. Platforms like Homevest allow you to request and compare mortgage offers from leading Spanish banks. They negotiate for you to ensure you get the best terms.

2. Incomplete documentation

Missing important documents in your application can lead to delays.

It's essential to ensure you have all the required paperwork in order, which can vary depending on your employment status—be it full-time employment or self-employment as an entrepreneur.

It's advisable to avoid applying for a mortgage between jobs, as banks tend to favor applicants with stable employment.

Keep reading to familiarize yourself with the documentation needed for a mortgage and to navigate the process in Spain more effectively.

3. Underestimating the total cost

Acquiring property in Spain means facing additional costs beyond the mortgage. These include Property Transfer Tax, notary fees, registration, agency fees, valuation charges, legal fees, and insurance. 

These costs could add 10% to 15% to the property's price. It's crucial to remember that you'll need to cover these additional costs separately, as they are not included in mortgage financing.

Learn about the taxes non-residents must pay when buying property in Spain and ensure your budget appropriately for your home-buying journey.

Streamline your application process with Homevest

Homevest offers support that can help you tackle these challenges; it's a digital platform that streamlines the process of securing a mortgage in Spain, even from overseas. 

By filling out a single mortgage application, you can submit your request to all the banks in the network, allowing them to compete to offer you the best deal.

Homevest matches applicants with banks that suit their needs, enabling them to receive multiple offers from Santander, Sabadell, CaixaBank, Cajasur, or Unicaja. 

This aims to simplify the often complex process of obtaining a mortgage in a foreign country by consolidating resources and providing options in one location.

“Thanks to Homevest, we secured favorable terms at Sabadell, even the notary pointed out that the loan conditions are good”, explains Stefan and Vivien, a German couple, who bought a holiday home in Costa Brava. Learn about their journey, the mortgage process, and how Homevest saved them time and money.

Homevest, in partnership with Hoteland legal services, offers property due diligence, contract negotiations, and a lawyer to represent you in Spain, for an additional fee. 

Frequently asked questions

1. How much deposit is required for a Spanish mortgage as a non-resident?

Non-residents must contribute a 30% cash deposit, and an additional 4-11% for taxes and fees, amounts that can fluctuate based on the property's location. Explore more insights on the deposit amounts to make confident decisions. 

2. How long does the mortgage process take in Spain for non-residents?

Getting pre-approved for a mortgage with Spanish banks takes around two weeks from the time you submit your application to when you receive a formal offer. 

After this offer, there are other steps you need to take into account. If you want to know an exact timeline of the entire process, read more details about the necessary steps.

3. Are there any specific documents non-residents should prepare for a Spanish mortgage application?

Beyond your identification, employment, and income documents, a Foreigner's Identification Number (NIE) is essential. You cannot complete a mortgage or buy property in Spain without this document.

4. Do I need to open a Spanish bank account to get a mortgage?

Having a Spanish bank account is necessary for buying property, particularly when you're taking out a mortgage.  Learn about the requirements of a Spanish bank account, compare costs, and explore accounts for non-residents.

5. Can non-residents have a co-applicant for a mortgage loan?

Yes, non-residents can have a co-applicant for a mortgage loan. In fact, for married couples, most Spanish banks prefer joint applications because there's usually a combined economy within the marriage.

Sources used and checked in 2023:

1. Buying a home in Spain and taking out a mortgage as a foreigner

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.