The Mortgage Process
This step by step guide will help you get an overview of the Spanish Mortgage process and the timeframe that can be anticipated. The process really sets in motion once you have identified the property of your choice and signed the “contrato de arras” – the sales contract with the vendors.
STEP 1
Decide on the best suitable mortgage option for your project
Once we have discussed your future project and current financial situation, we will research the best solutions for you. It is important that you give us all the necessary information by filling out the mortgage questionnaire. It is best if we fully understand your situation and needs before making any proposals.
STEP 2
Build your mortgage request
We will send you the list of paperwork needed to submit an application for a Spanish mortgage. Although we understand the complexity of obtaining certain documents, we cannot stress enough the importance of submitting a clear and complete file to the banks. This is why we are here to help you. Sending incomplete information to the bank’s underwriting departments will only cause confusion and additional delays.
STEP 3
Underwriting process
In general, once your full file is submitted to the bank, we will usually get initial feedback within 2 days. Depending on the amount requested, some bank agencies have the possibility of approving your request without submitting it to the higher loan committee. However, for higher loan amounts, there are different steps we need to go through and this will prolong the process.
- Thanks to our exclusive agreements with the banks, we have managed to negotiate dedicated and quick processes thus avoiding additional delays in the study of your application.
STEP 4
Mortgage Offer
It is now time for the bank to give you the offer in principle, called “oferta vinculante”. The offer always depends on the valuation of the property. This means that if there is a big difference between the valuation and the proposed purchase price, the bank is in its right to change the offer. Under normal circumstances this process does not tend to pose big issues. It should also be noted that to pay the monthly installments of your new mortgage, a bank account in the bank will usually be required.
STEP 5
Life Insurance / Home Insurance
It is obligatory in Spain to have a home insurance to cover the value of the property. Life insurance is not obligatory but most banks will encourage you to do one as they see it as a plus in the mortgage application. Normally banks will improve the interest rate if you contract the insurances with them.
STEP 6
Completion time!
Once you have signed the mortgage offer, the notary and the bank will contact you to set up the date for completion. This process usually takes 2-3 days. If further documentation is required, it can take up to a week or even more if the involved parties don’t provide the requested documents. In total the whole process normally takes between 2-3 weeks to finalize.
*Please note that the new Spanish mortgage law which came into force on the 1st of June 2019 is going to have an effect on many aspects of the mortgage process in Spain. This includes timeframes and eligibility depending on origin of income and residency status. We are working on updating our information. In the meantime, please contact us via phone or e-mail for the most recent information available. Thank you.
Disclaimer
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