In order for the bank to approve you for a mortgage, they primarily look at two factors to consider your affordability for a mortgage in Spain:
The loan to value and your debt to income ratio
Loan To Value
For Spanish residents, banks usually offer to lend 80% of the purchase price (excluding fees).There exists an option to get up to a 100% by purchasing a repossessed property through the bank. Please get in touch if you are interested in more details on the requirements for this option.
For non-residents, the maximum loan to value banks offer at the moment is 70% of the purchase price. That being said, it is common that they only give 60%. The percentage can vary depending on the country in which you reside/declare your taxes and your mortgage preferences.
Debt to Income
One of the most important elements when applying for a mortgage in Spain is INCOME and DEBT. The relation between these two is important as it gives the bank information on how much you are able to pay per month for a mortgage. The bank will only allow your total debt to represent a certain percentage of your income (normally they will base their calculation on your net income). The percentage will vary on a case to case basis but for residents the banks will usually accept a DTI of 30-35% (up to 40% in special cases). For non-residents the accepted DTI is set to 25-30%, depending on the LTV (see an example of a mortgage under the menu “Case Studies”).
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