MORTGAGES and Money in Spain

Spanish property mortgage for non-residents

Orbit Properties offer professional and impartial advice on your Spanish mortgage application.

Interest-only mortgages now available.

Once you find the right property on the Costa del Sol, you may need some advice on the benefits of Spanish mortgages. Whether you have purchased an investment property, a holiday home, a new development, a resale property in Fuengirola, or a property with a guaranteed rental income on the Costa del Sol, getting the correct financial advice is essential.
Orbit Properties will advise and guide you with all aspects of buying property in Spain, including financing your purchase with a Spanish Mortgage.

For non-residents the maximum loan-to-value of a Spanish mortgage is normally 70%, which means a deposit of 30% plus IVA is required if you are purchasing a property off plan and you can then take out a Spanish mortgage upon completion for the remaining 70%.
The same rules apply to both new and resale properties. All of the legal and mortgage arrangement fees are additional and must be paid by the borrower.
When Spanish mortgage lenders consider your loan application, they will not take into account any potential income from renting out your Spanish property.

If you are in full-time employment, the Spanish mortgage provider will sanction the loan depending on your income from your last three pay slips and your P60 document.
You will need to submit copies of these documents, as well as any other paperwork they may require.

If you are self-employed, your income will be calculated as your average annual net income over the previous three years. You will require evidence to support this. In the past, as self-employed, or a company director, it has been difficult to find Spanish mortgage lenders willing to sanction loans without submission of their full statement of accounts. Please note however, most banks allow self-employed applicants to state their full income level on an application form (and supply all supporting documentation), rather than just present the figure that they have presented to the Inland Revenue for taxation purposes.
As a general rule, the Spanish mortgage lender verifies that your total monthly payments to be made should not exceed 35 % of your net monthly disposable income. 'Outgoings' that are taken into account are your existing debt and any other regular payments, such as any mortgage repayments at home, rent, personal loans and any other commitments.
You may also submit proof of any other secondary investments or pensions etc., which will earn you dividends in the future, for consideration.

Spanish Mortgage periods may extend from 10 to 40 years.

Once you have decided on your dream home, the bank will instruct a property valuation (NOT a structural survey) to be carried out for mortgage purposes. You must cover this additional cost before the valuation is undertaken.
At Orbit Properties, we know that taking out a mortgage is probably the most important financial decision that you will make in your life.
That is why our products are designed to make this process easier:

Straightforward ways to pay your mortgage.

* We will always offer a range of products to meet your needs. Our Spanish mortgage products are available for the purchase, construction or refurbishment of property, or re-mortgage from other lenders.

* Capital Repayment Mortgage: for those customers who wish to borrow up to 70% of the valuation of the property and repay between a 5 to 30 year term.

* Interest Only Mortgages: for those customers who wish to repay interest only for any period up to 10 years of the total mortgage term.

* Construction Mortgage: for those customers who have purchased a plot of land and wish to build a property.

* All documents are translated into plain English and fully comply with the Spanish legal system. Please note all official contracts are in Spanish according to the Spanish legal system.

* We will guide you through each stage of the Spanish mortgage process and help ensure everything goes smoothly by providing speedy provisional mortgage offers, valuing your property, and handling all the necessary paperwork. Moreover, you can be sure of a personalised quality service and a provisional mortgage approval within 48 hours.

Requirements for a Spanish mortgage:

* Non-resident Certificate (available from your Spanish bank).

* Monthly transfer order to your current bank account to cover loan payment.

* Latest 3 pay slips.

* Latest Tax return.

* Insurance required on your property.

Some things to bear in mind:

1. Please ensure that you will have full title to the property on completion and that the 'Nota Simple' - a document that confirms the legal registration of the property - is available for the lender. This document is required before a valuation can be carried out.
2. With new properties, find out the date the property will be registered, as the lender cannot lend on the security of the property until it has been registered.
3. Check with the estate agent/solicitor/vendor of the costs charged by the legal & government authorities for purchasing a Spanish property, whilst noting that the lender will have their own legal costs for assigning the loan (which they will normally advise when they issue the mortgage offer).
4. The completion of a Spanish mortgage takes place in front of an appointed Spanish notary and all parties to the mortgage, including the vendor, lawyers and a representative of the lending bank need to be present.
However, a power of attorney may be used to sign on your behalf for the Spanish mortgage and land deeds. A copy of this power of attorney will need to be presented to the lender in good time before completion.
5. A Spanish bank account will be required and some lenders offer this as part of their service, but not all.

Here, at Orbit Properties we guide you step by step through what can seem a maze of paperwork. You will find the helpfulness and expertise of our staff immeasurable in the purchase of your Spanish property. We will advise on the documentation you must provide, and will constantly liaise with the lender on your behalf. We will make certain that your mortgage application is processed expediently.



Money transfers for property transactions in Spain

Routine remittances from banks in the UK will usually take about a week. British Citizens wishing to have funds sent to Spain should therefore make the necessary arrangements with their UK bank in plenty of time.
Orbit Properties S.L. are pleased to recommend the services of a company called HIFX ltd., who conduct money transfers speedily, and at a much lower cost than the high street banks. Please feel free to contact them, quoting our special reference 116398, to obtain full details of the cost savings and effective service that they able to offer you for all your financial transactions, to and from Spain.
In the U.K. telephone 01753 859159 or fax 01753 859169.
The telephone number of their office in Spain is 952587507
Or you can visit their website at www.hifx.co.uk

In emergencies it is possible to obtain funds from the UK within an hour through any branch of Western Union or Money Gram.
Information for Western Union is available through the following free telephone numbers:
In the UK - 0800 833 833, SPAIN - 900 633 633.
And for Money Gram 901 20 10 10.

There is no restriction on the import of capital into Spain, but persons who make such transfers are advised to keep records showing that the funds are transferred from abroad and not derived from income arising in Spain. An important point to remember is that even if only in transit, passengers should declare on arrival money brought into the country, if this exceeds the equivalent of 6,000 Euros. Failure to do so can result in confiscation of the money on departure.

Transfers of capital from Spain are governed by the Spanish Foreign Exchange regulations. From February 1992, residents who wish to travel abroad are entitled to take out up to 6,000 Euros per person per trip. Anyone wishing to take out more than this should consult their bankers before doing so, to ensure they are complying with the latest regulations.

The Ministerio de Hacienda (Ministry of Finance) has published a pamphlet on the rules and regulations of 'Foreign Capital Investments in Spain' and any interested persons can write direct to: -

Servicio Central de Información del Ministerio de Hacienda,
Calle Alcalá 5,
28010 Madrid.

Detailed information on any of these points can be obtained from your Estate Agent, established local banks, your solicitor or financial consultant.
Orbit Properties S.L. will be pleased to effect your introduction to an impartial professional financial advisor if you require it.