The real estate market in Barcelona and throughout Spain has become very active again after years of economic crisis. Most of us don’t have the money to buy a property outright and need a mortgage to support the purchase of their home. To find out how to get a mortgage, just follow these steps.
The Bank of Spain recommends that borrowers should devote 35% of their total income to cover the mortgage and other fees. This is also taken into account by banks before they approve the mortgage application.
The next step is to get to know the credit market and find out which mortgage offers are the best for you. This is done in particular by requesting the pre-contractual information sheet (FIPRE). On this basis, you can make an initial decision. If it is a fixed rate mortgage, you need to pay special attention to the incentives. If it is a variable mortgage, the interest rates will change in the future.
By now, you have certainly decided on a financial institution through which to buy a house or flat in Valencia or elsewhere. Next, you will need to provide a report from an approved appraisal company stating the estimated value of the property on which the bank will base its mortgage offer. The price indicated in this report must be paid by the prospective buyer.
You must attach the (FiAE) contract in which the loan clauses are included, the monthly installments, a copy of the contract to be signed and a document reflecting the costs to be paid by the client and the terms of the mortgage. Based on all this information, the Bank’s Risk Department will make an evaluation and, if the mortgage is approved, will make a binding offer to the customer.
Borrowers must deposit an equivalent of about 30% of the total price of the property. If they accept the binding offer, the bank requires them to transfer the deposit to its account. This money is used to pay the costs of formalizing the mortgage and to cover the purchase price.
The last step is to go to a notary and sign the deeds at the land registry. This will make you the owner of the house, even if you still have to pay taxes and registration fees.
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