All about your mortgage

Securing a mortgage in Spain is not usually a lengthy process but can prove to be a difficult and stressful one due to the language barrier and can induce serious financial problems to the families who have not understood, analysed or negotiated their mortgage conditions correctly.

The objective of FreeEmortgage is to simplify the whole process for all of our clients and secure the best conditions possible for each case.

FreeEmortgage provides you with a complete guide to allow you to understand everything including the small print about your mortgage.

A mortgage is a loan given by a financial institution to help proceed with the purchase of a property in exchange of a property as security. back to the top

Amount required (importe solicitado): It is the amount of the loan. The financial institution will do an official valuation of the property and will lend up to 80% of the amount of this valuation.

Payment terms (plazo de devolución): Number of years required to pay back the totality of the loan. Financial institutions usually accept terms of up to 40 years or up to 80 years of age.

Interest rates (tipos de interes):

Variable interest rates
Fixed interest rates

References:

Euribor
IRPH
Ceca

Monthly payments (cuotas):

This is the amount of money paid back on a monthly basis. We recommend that your monthly mortgage payments do not exceed 35% to 40% of your net monthly income.

There is option to include a period where you will only pay the interest at the beginning of the mortgage which means that the amount of your monthly payments will be lower.

Annual Rate (tasa anual equivalente/TAE): It is the actual cost of the operation. This amount includes the annual interest and the annual cost of the mortgage. The lower it is the better.

Fees (comisiones): are amounts the client must pay to the financial institution to cover different costs: opening fee, cancellation fee, etc…

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> 7% tax.
> Stamp duty (known as AJD) which will be of between 0.3% and 1% of the property price depending on the region where the property is located.
> Notary fees.
> Land registry fee which will vary depending on the price of the property.
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> Valuation of the property: Fee to be paid directly to the professional property valuer. This is the person who will decide the value of the property on behalf of the bank. This fee is of can be between 200 euros and 1000 euros but is usually of approximately 300 euros.
> Opening fee: Banks in Spain generally charge an opening fee which is usually of 1% but can be anything between 0.3% and 2% of the mortgage amount.
> Stamp duty (known as AJD).
> Notary fees.
> Gestoria: Entity who looks after all the official paperwork and ensures that the title deeds are entered correctly in the land registry.
Basic home insurance which is compulsory.
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> Contact the Land Registry who will provide a Nota Simple which will inform you on the names of the legal owners of the property and of any pending payments.
> Complete the mortgage application form and provide all the documentation required.
> Presentation of your application to various financial institutions.
> Client’s agreement if the offer received from the financial institutions matches or betters the original requirements.
> Valuation of the property.
> Mortgage offer from the bank detailing all the conditions.
> Signature of the mortgage in front of the Notary.
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Several options are available for those who are unhappy with their current mortgage conditions:

The client can negotiate better conditions directly with the lending financial institution. Different cost may be applied depending on the changes made.
If your bank is not prepared to better the conditions, you can look for another bank that will. The mortgage will simply be transferred from one bank to the other without changing the amount or terms.
The client can request an extension to the terms mortgage meaning that the loan will be refinanced and the terms will be extended meaning the monthly instalments will be reduced.
The client can also refinance the mortgage adding any additional loans (personal, car, etc…) to the total amount.

FreeEmortgage can save you the hassle and look after renegotiating your mortgage conditions for you… back to the top