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.
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. We need to fully understand your situation and needs before making any proposals.
Build your mortgage request
We will send you the list of paperwork needed to submit the application for your mortgage. We understand that some documents can be difficult to obtain, but we cannot stress enough the importance of submitting a clear and complete file to the banks. Sending incomplete information to the bank’s underwriting departments will only cause confusion and additional delays.
In general, once your full file has been submitted to the bank we will get feedback within 3 to 5 days. Depending on the amount requested, some banks 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 banks, we have managed to negotiate dedicated and quick processes thus avoiding delays in the study of your application.
Once you have been approved for the mortgage and the bank has provided you with their offer, it is time to order the valuation. This is an important step as the mortgage offer always depends on the outcome of the valuation. If there is a big difference between the valuation and the proposed purchase price, the bank has the right to change the offer. Under normal circumstances, this step does not pose any problem.
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 take one and they see it as a plus in the mortgage application. Normally banks will improve the interest rate if you contract the insurances with them.
Once the bank has received the valuation, and if the valuation of the property comes in either at or over the purchase price, the bank will produce a document called the “FEIN” (Ficha Europea de Informacion Normalizada). Upon approval from the client, this document is sent to the notary through a dedicated online platform. If everything is correct, the notary approves the FEIN and from this point in time there is 10 days cooling off period (this timeframe can vary from region to region and in some regions the period is 15 days). Before completion, the client has to arrange a meeting with the notary during which the notary will explain the details of the mortgage. After the explanations, the client will be asked by the notary to take a small test to ensure that everything has been understood.
Provided we do not encounter any unexpected delays or set-backs, the whole process usually takes between
6-8 weeks to finalise from the moment we have received all the necessary documentation from the client.
*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.
At Spectrum International Mortgages we do an annual update on the rate development in Spain. We do this every year in February and this year will be no different. As ever, the rates we mention are based on the market at the moment of publishing and we cannot guarantee...