How to apply for a mortgage in Spain as a self-employed non-resident

Getting a mortgage in Spain as a self-employed non-resident can feel challenging if you don't have a regular income and local job history. But it's possible, and many have done it already. 

This simple guide will explain the procedure, the available mortgage options for you, and how Homevest can help simplify things for you directly from abroad.

What is the process of getting a mortgage in Spain as a self-employed?

Securing a mortgage in Spain as a self-employed foreigner involves several important steps that can make the whole process smoother and faster. 

If you don't know where to start, here's an overview of what to expect, from initial planning to signing on the dotted line:

1. Assess affordability: Self-employed non-residents often need to provide a down payment of 30-40% of the property’s value. That's much more than what locals have to provide. 
2. Work with a broker: An online mortgage broker can make this whole ordeal much more straightforward.
3. Prepare documentation: Gather all the important financial records, such as tax returns (from at least the last two years) and identification.
4. Submit your application: Choose a lender and apply. However, you may need to apply to more than one because your eligibility depends on your profile. Certain banks, like Unicaja, don't accept self-employed applicants at all.
5. Property valuation: The bank or an independent appraiser will appraise the property.
6. Await the bank's final approval.
7. Finalize the deed and register ownership.

Is it hard to get a mortgage as a self-employed?

As someone who's self-employed, I'm well used to not having a regular income. Some months, they're exceptionally high, others, far less. But that's certainly not something banks like to see. So, this can complicate getting a mortgage.

But there are strategies, and even hacks, to overcome this hurdle and prove you are financially stable to Spanish banks.

To present your income in the best light, try using a 12-month average of your earnings instead of focusing on the monthly fluctuations. To the person looking at your application, this helps create a clearer picture of your overall income. 

If you have long-term contracts with clients, present them to the bank to demonstrate that you indeed have steady work lined up for the foreseeable future. 

Finally, provide as many extra financial documents as you can. Things like savings accounts or investment portfolios. These can further strengthen your case by showing additional stability.

Homevest is a helpful tool that can estimate your budget and determine the maximum loan you can expect to secure from Spanish banks. You'll receive accurate estimates straight to your inbox to guide your next steps.

What are the best Spanish mortgages for self-employed individuals?

Mortgages for non-residents, whether self-employed or in permanent employment, are basically the same. 

There are a few different options to consider:

1. Fixed-rate mortgages have an interest rate that remains the same throughout the loan term, giving you the predictability of steady monthly payments.
2. Variable-rate mortgages where the interest that fluctuates over time since it's linked to the Euribor rate, making your payments cheaper if the rate goes down or more expensive if it goes up.
3. Mixed-rate mortgages combine fixed and variable rates, starting with a fixed rate for an initial period before switching to a variable rate.
4. Green Mortgages offer low interest rates as an incentive if you’re purchasing an energy-efficient property.

Popular banks offering mortgages for non-residents include Sabadell, Santander, CaixaBank, Bankinter, and Cajasur. 

Banks in Spain can be quite different from each other, so each has its way of doing things. Still, they usually have options that work for self-employed buyers, depending on your finances and the kind of mortgage you want. 

You must also have been self-employed for at least three years to qualify for a Spanish mortgage.

What documents do I need to prepare when applying for a mortgage in Spain as a self-employed?

To apply for a mortgage in Spain as a self-employed non-resident, you'll need to provide personal and company information to support your application. 

Here’s a list of the key documents required:

• National ID and NIE (Foreigner Identification Number)
• Income statements for the past two years to provide evidence of your earnings
• Annual accounts for the last two years, including profit and loss statements
• Accountant's reference letter, which should include details about your company, such as the name, the sector, turnover, and your salary or other income from the business
• Bank statements for the past six months to demonstrate your financial behavior and savings
• Credit report showing your credit history to assess your reliability as a borrower
• Annual VAT return: For applicants working in the UK, the P45 form is also accepted.

Depending on your specific situation and the bank’s risk assessment, additional documents might be requested.

For example, the bank may ask for more proof of your income, like extra bank statements or even a detailed breakdown of your monthly expenses.

Is there an easy option to access a mortgage in Spain as a self-employed living abroad?

Using a mortgage broker can simplify the process of getting a mortgage in Spain, especially if you’re self-employed and living abroad. 

If you’ve already found a property, Homevest can connect you with mortgage brokers to help you find the right mortgage. 

A mortgage broker works with many different lenders so they can find the best rates for you.

Apart from that, they also know the local rules and make the application process faster and smoother for non-residents. That way, you can have a hassle-free experience and let them handle the intricacies of the mortgage application process for you. 

Sources used and checked in October 2024:

1. Expatica
2. Right Casa

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.