Property financing Spain: how to make a successful purchase?

Spain is a country that attracts many property buyers, seduced by its climate, culture and cost of living. Whether you want to live there, go on holiday, or invest, buying property in Spain is an opportunity. But how do you finance your project? What are the options, the steps to take, and the pitfalls to avoid? Immo 365 Costa Brava an update.

What are the property finance options in Spain?

Tofinance a property purchase in Spain, you have two main options: a mortgage or a personal contribution. A mortgage is a loan granted by a bank that allows you to finance all or part of the purchase of your home in Spain. the purchase of your home or property. It is repayable over a set period of time, with interest rates and charges. interest rates and charges.

As for the personal contribution, this is a sum saved that can be used to finance part or your real estate purchase in Spain. By making it possible to reduce the amount of the mortgage, the personal deposit therefore minimises interest rates and fees.

To choose between the real estate credit or the personal contribution, you need to take several criteria into account, namely:

• the price of the property,
• the interest rate on the property loan,
• its term,
• the amount of your contribution,
• the return on your savings and your tax situation.

As a general rule, it is advisable to usehome loans in Spain if the interest rate is lower than the return on your savings, and if you benefit from tax advantages. On the other hand, it is advisable to use your personal contribution if the interest rate on the mortgage is higher than the return on your savings. Don't hesitate if you want to reduce the total cost of buying your property.

What are the steps involved in obtaining a mortgage in Spain?

If you want to obtain a property loan in Spain, you need to follow several steps.

Finding the property

You need to find the property in Spain that suits your needs, your desires, and your budget. You can call on our estate agency, which will help you with your project and guide you through the administrative administrative procedures. We offer different types of property such as a apartment for sale in Spain between individuals for example.

Reserving the property

It is necessary to pay a deposit, which is usually 10% of the price of the property you wish to purchase purchase in Spain. You must also sign a reservation contract, which sets out the conditions of the sale and commits you to buying the property. the sale and which commits you to buying the property within a specified period.

Looking for a mortgage in Spain

In your search for a home loan, consider comparing the various offers available from banks in Spanish banks in order to choose the one that suits you best. You can use the services of a mortgage broker. broker. This professional will help you to negotiate the best loan terms and will assist you with the banking procedures.

Applying for a mortgage

You will need to compile a application for a mortgage in Spain which contains the following documents. :

• a valid identity document,
• a proof of address, income and your professional situation,
• proof of assets and your tax situation,
• a certificate of non-residence, if you are a foreigner (not resident in Spain for tax purposes),
• a reservation contract for the property.

Make sure you send your mortgage application to the bank you have chosen, which will study it and within a few days. If your application is accepted, you will need to sign an offer that contains its interest rate, term, monthly repayments, total cost, guarantees and insurance. insurance. You have a 10-day cooling-off period in which to accept or reject the mortgage offer.

Signing the deed of sale

You must go to the notaire, where you will be joined by the seller, one of our estate agents at your service and the bank representative. Together, you will sign the deed of sale of the property. You will need to pay the outstanding amount for the property in Spain, not forgetting the notary's fees, the registration fees and the costs of management fees. Once these obligations have been met, you will receive the keys to the house, marking your official transition to as the rightful owner.

What are the advantages and disadvantages of financing a property purchase in Spain?

Financing a property purchase to live in Spain has its advantages and disadvantages that you should be aware of before taking the plunge.

The advantages

First of all, you can benefit fromattractive interest rates, which are generally lower than those offered to French people in France. Enough to enable you to reduce the cost of your home loan. Secondly, you can benefit from a dynamic market that offers many opportunities to buy both new and existing properties. old. This allows you to realise a capital gain on resale.

As a buyer, financing your property purchase in Spain gives you access to advantageous tax schemes that reduce your tax liability. These include the deduction of interest on the mortgage or the exemption from property tax for the first two years. You can use a real estate capital gains calculator for non-residents of Spain to get an idea of your potential income. overview of your potential income.

The disadvantages

One of the main disadvantages of financing a property purchase in Spain lies in the complex administrative procedures that require you to provide numerous documents, meet deadlines, and pay fees. You also have to adapt to a different legal system, which can present :

• specificities,
• risks
• constraints such as the need to obtain a tax identification number (NIE)
• the possibility of property seizure in the event of non-payment of the credit granted.

You will also need to take into account the fluctuations in the country's property market, which can influence the value of your property and make it difficult to resell, especially if you are a non-resident.

As you've realised, financing a property purchase in Spain is not a decision to be taken lightly. You need to compare and negotiate to find the best possible finance and complete your property project with complete peace of mind. peace of mind.

To benefit from support from A to Z, you can request the services of one of our estate agencies. Our portfolio is highly diversified, and the properties we can offer you all benefit from excellent locations in the the Catalan coast. You can count on our multicultural team to quickly find you the property that meets your needs. the property that meets your requirements. With us, you'll also benefit from legal advice and support. multilingual legal and tax support.