Spain is a popular destination for tourists, but also for people who want to buy or build a property. If you need financing for your Spanish property, there are a few important things to consider. In this post, we will go over some of the most important factors to consider when financing your apartment or house in Spain.
Finding financing
When it comes to buying a property in Spain, many Germans are faced with the question of how they can find financing for the project, or which bank finances a property in Spain. Fortunately, there are a number of ways and resources to simplify the process.
One of the best resources for Germans, Austrians or Swiss who are looking for financing for a property in Spain is the portal finanz-land.de. The portal specializes in arranging financing for property purchases in Spain and offers a variety of options for potential buyers. You can request a financing offer directly via the following page: https://angebot.finanz-land.de/finanzierung/auslandsimmobilie/
Credit rating
A good credit rating is essential for any type of loan, but it is even more important when financing a property in Spain. Banks in Spain carefully check the creditworthiness of potential borrowers to ensure that they are able to repay the loan. It’s important to carefully review your finances and make sure you have sufficient income and a positive credit history to improve your credit rating.
Not every bank finances foreigners
There are a large number of banks in Spain. Unfortunately, not every Spanish bank finances the purchase of real estate by “foreigners”. For this reason, mortgage brokers or credit intermediaries in Spain are a good choice, because they know which banks are the right ones for you and regulate the request for quotations and support you in the comparison.
Mortgage terms and conditions
The conditions for mortgages in Spain can vary greatly from bank to bank. It’s important to compare carefully and make sure you understand all the costs and fees before deciding on a mortgage. The most important factors include the interest rate (especially the effective interest rate), the term, the repayment options, the total burden and any penalties for early repayment.
Security
Banks in Spain usually require collateral for the loan, such as a mortgage on the property to be financed. It is also important that you, as a borrower, can contribute a certain amount of equity to the mortgage lending. This is usually between 30% and 40% of the property value for foreigners.
Taxes and fees
When buying or building a property in Spain, there are various taxes and fees. Since these costs are not insignificant, you should include them in your financing and make sure that you can pay them. Key taxes and fees include Value Added Tax (IVA), Transfer Tax (ITP), Notary and Land Registry fees, and any legal fees.
Language and culture
If you don’t speak Spanish or don’t know the culture and laws in Spain, it can be difficult to get mortgage financing in Spain. It may be helpful to bring in an intermediary or lawyer to guide you through the process and help you communicate with the bank.
