Mortgage for foreigners or non-residents investors – What steps must be taken into account?
There is a growing demand of foreign or non-residents investors for buying properties in Spain. Months of certain stagnation in Real Estate market caused by the coronavirus health crisis, are beginning to be left behind. For some time now, the interest in buying a property is growing notably. If you live outside Spain and are looking for a investment, here is a complete guide on mortgages for foreigners or non-residents with all the steps to be kept in mind.
Spain is a very attractive destination for foreigners from anywhere in the planet. Its climate, and cultural, leisure and gastronomic offering makes it a place to spend long periods of time.
More and more foreigners or non-residents are considering buying a property , and not only spend holidays or specific times of the year, and also to obtain an economic return. For example, apartments with a license for tourists are an increasing demand, but what conditions, documentation and requirements are basic and essential to contract a Real Estate loan in Spain for foreigners or non-residents?
Mortgage for foreigners or non-residents investors – What steps must be taken into account? Conditions for applying for a mortgage for foreigners or non-residents
To begin with, it is advisable to make clear the definition of a non-resident person. It is considered as such when the following assumptions are met,
- Does not stay longer than 183 days in Spain throughout a year
- Main activities or economic interests are not in Spain
If these circumstances occur, there are a series of particular conditions when applying for a mortgage to buy a property
Characteristics for mortgage loans for foreigners
- Amortization period. For Spanish residents a mortgage loan, can have up to a maximum of 30 years. In the case of foreigners or non-residents, the term is more limited. The usual is that the limit to return the requested money is between 20 and 25 years.
- Mortgage amount. About mortgages for residents in Spain, the bank usually finances up to 80% of the purchase price or the appraisal value (the lowest value). However, requesting a mortgage for foreigner or non-resident implies that the amount of the bank will be lower. Depending on the bank, the maximum level that is usually financed is of the 60%.
- Interest rate. It will depend on the entity with which the operation is carried out. As in these cases, it is almost always a second home or second residence, the interest to be paid for the Real Estate loan is higher than that applied for habitual residence.
In addition, mortgage loans granted to foreigners or non-residents are usually, as a general rule, at a fixed rate, that is, during the time of repayment of the capital, the amount to be paid is always the same.
Documentation to submit
The documents that have to be presented to the bank to apply for a mortgage of these characteristics do not usually vary too much as for any resident in our country. The most common are usually,
- Copy of NIE or passport
- Work contract
- Pay slips or proof of income obtained in the country of residence
- Bank statement where the usual income is made
- Tax return
- Tax residence certificate
- Contract of the property to buy (or deposit contract)
Any other document that the bank considers appropriate to carry out the study and analyze the viability of the requested operation can be added to this documentation. In the event that the financing requested is viable, the signing and obtaining procedure is the usual one.
If you are a foreigner or non-resident, and considering buying a property in Barcelona, please consider to ask for advice at any bank entity, so that they can guide you on the exact steps to apply for a mortgage.
And remember that, if you are looking for a property as a first or second residence, at Hermes & Mathew we have a wide range of high standing homes for sale, in the best areas of Barcelona and with the most advantageous market conditions.