If you don’t want to do equity release, it is possible to secure a mortgage for the property you are buying in Spain by obtaining a mortgage from a local Spanish bank. We have or any Lawyer has contacts with good, local banks and we can help you obtain a mortgage.
Most Spanish mortgages are based on a variable, not a fixed, interest rate. The mortgages are generally based on the Euribor index, which tends to be better than the IRPH that some savings banks try to offer. Even if the differential/margin that the bank offers on the Euribor index is higher than what they offer on the IRPH index, normally the Euribor option is the better one. You can look at the historical levels of both indices to decide for yourself.
The documents typically required by a bank are :
♦ Your work contract
♦ Your last 3 paycheck stubs
♦ Your latest income tax return
♦ Your pre-agreement with the seller
♦ Proof that the property tax (IBI) on the house is paid up to date
♦ Other mortgages or loans that you may have
♦ All property titles, both in Spain and overseas
♦ Certificate from work authorities (vida laboral), showing your past work history
♦ Records of your assets (bank/mutual fund statements, etc.)
♦ Prenuptial agreements, if any
♦ Nonresidents: A certificate of non-residency (form available from the bank)
♦ If self-employed: Local tax on economic activities (IAE)
♦ If self-employed: VAT tax you paid for the last trimester and last year
If you get a mortgage, you will become acquainted with an appraiser (tasador). The bank requires an appraiser to ensure that their loan to you is safe. You will need to pay for the appraiser’s work, usually between 300-500 euros. Note that the tasador by law is a licensed architect, so even if you don’t need a mortgage, but have doubts about the structural integrity of the house, you might want to hire an appraiser.