There are a number of ways that you can finance your new property in Spain. If you are able, then paying with cash will always be a viable option – but there are also a number of loan options that should be considered before you even begin your property search.
The first decision you will need to make is whether you should go for a UK mortgage, or search for one from a Spanish mortgage broker – and in general, we would recommend having a mortgage agreed in principle before you start looking at houses.
If you decide that you would like a Spanish mortgage, it’s important to remember that there are likely to be less options available to you. Spain was particularly affected by the financial crisis, and is still struggling to recapture the losses that it experienced during the worst times. Lending conditions here are even more stringent than you would find those in the UK.
Wherever you chose to obtain your mortgage from, you would do well to remember that the offers available will change on a daily basis, so we would recommend speaking to a mortgage broker (particularly one that specialises in the overseas market) to discuss your options. You will also need to know exactly how much of a deposit will be required of you in relation to the mortgage you need (in Spain this is usually 30-40% for non-residents, depending on conditions) – as well as interest rates, loan terms and the criteria that is used to determine loan-to-value amounts.
To apply for a mortgage, you will need to provide proof of income and identity, and details of your bank account and credit cards. You will also need to make sure you know exactly what your monthly repayments will be, and how you are going to meet them – after all the last thing you want to do is take on a mortgage that you cannot realistically afford.
Once you know how you are going to finance your new property in Spain, we at the Spain Buying Guide thoroughly recommend opening an account with a currency exchange specialist like Smart Currency Exchange. An account is free, and you will immediately be allocated your own personal trader – who will be on hand to discuss your currency strategy, and how to make the best of your transfer. Not only do Smart Currency Exchange offer you exchange rates that will save you up to 4% compared to your local bank (that’s £4,000 on every £100,000 that you transfer), but they have a number of tools and resources that you can use to help you on your way.