Spanish purchase process guide
step by step process and responsibility chart
Use the arrows to move through each step of the process, and our responsibility chart will help you understand who needs to do what at each stage.
Apply for a mortgage
To begin your application click the ‘start application’ button below.
You can borrow:
Maximum 70% if you pay tax outside of Spain
Maximum 80% for Spanish taxpayers (70% on second homes)
The value of the loan will be based on the property valuation or the property price, whichever is lower.
- Copies of your Passport / NIE (for all parties that will be on the mortgage)
- Your most recent tax declaration or P60
- Your last three payslips
- Details of other properties you own including any potential rental income
- A bank statement of the last 6 month
- An Experian credit report
Who can apply?
Anybody can apply for a loan in Spain over the age of 18, regardless of where you earn your income, pay taxes or live.
The amount you can borrow depends on your income – debts. Most Spanish lenders will not lend money if your combined outgoings (mortgages & loans) add up to more than 40% of your total net (after-tax) income.
We have an in-house risk assessment team, that can help you understand what you can borrow. Get in touch here
Banks in Spain will only accept income that can either be shown on a tax return or comes from earnings from a property with rental agreements in place.
Bonuses can be included however proof needs to be shown to confirm that income is consistent.
You will need to show at least 2 years of income.
Credit cards, any loans & mortgages. You also need to include your future Spanish mortgage payments for the mortgage on the Spanish property (use the Spanish mortgage calculator to get this figure).
Payments on groceries and other household income are not part of your debts.
How long does it take to apply?
Once you have submitted your application, the Foxes risk team will create a lender report for the banks.
Assuming we have all the necessary paperwork, then you can expect to receive an offer in around 7-10 working days. It is possible to receive an offer quicker but it depends on how busy the lenders are and how complicated your application is.
If the lender requires further paperwork then any delay in sending the paperwork will affect how long it takes to get an offer.
We are dealing with 3rd party banking institutions and have no control over their procedures, but our team will do everything possible to ensure a timely application.
Reserving a property
Once you have identified a property it is advisable to remove the property from the market while you carry out your legal checks and valuation. This process normally takes around 30 days, if there are legal issues with the property then this can be extended.
Most agents will accept 3,000 Euros, although for properties over 300k they may ask for 1% of the purchase price?
The following are reasons why a deposit would be refundable:
- Subject to finance. You can include a clause that in the event you cannot purchase due to issues with a mortgage, the deposit can be refundable.
- Valuation. If the valuation on the property is below the asking price, you can get a refund or negotiate the price.
- Legalities. If there are any legal issues with the property, debts, licencing issues etc
Each of these clauses should be included in the reservation contract. If they are not included then your deposit may be at risk.
What are legal checks?
Before moving forward with the purchase, you need to ensure you are buying a legal property, these checks should be carried out before moving to the next stage.
- Check the title/ownership of the property
- Check that the property has all the relevant licences
- Complete and/or check the private contract detailing the terms and conditions of the sale of the property
- Complete purchase before a public notary, either on your behalf or with you in person (this may incur extra costs depending on location)
- Register/Check cadastral
- Check cadastral and land registry for any discrepancies
- Tax Registration
- Check for debts – community, utilities, townhall sanctions
If you are purchasing the property with a mortgage then a valuation will need to be performed by a 3rd party company which the bank accepts.
The amount the bank lends will be based on the valuation if it is lower than the purchase price.
Valuations can take between 7-14 days to complete, our team can request this on your behalf.
Private purchase contract (ARRAS)
Contrato de Arras is a private purchase contract between you and the property owner.
You will be required to pay 10% of the purchase price upon signing to the owner.
Once signed you and the owner are locked into the purchase.
If you do not complete the purchase then you will lose the 10% and your original deposit. If the owner does not complete the sale, then depending on the contract terms you would receive a full refund + a further 10% or whatever was negotiated.
The final purchase
The purchase will be completed in a Spanish notary, your lawyer will be in charge of booking the notary and liaising with the different parties (bank, sellers, agent etc). If you are unable to attend the purchase, then your lawyer can represent you (with Power of attorney).
Once all the contracts have been signed and the checks distributed (the checks will be brought by the bank for the mortgage, deposit and taxes) you will receive a copy of the deeds and keys to the property.
Property Purchase Responsibility Chart
Use the below chart to help you through your property purchase. At each step, one or more parties can be involved or will take responsibility.
Can be involved
Can be involved (with power of attorney POA)
The buyer identifies properties they would like to view and along with the agent will view those properties
Once you have identified the property you wish to purchase, inform the agent and agree a price. If the price is below the asking price, then your agent can help negotiate an agreement.
Reserving a property takes the property off the market while you carry out legal checks and qualify for a mortgage if you need finance. A reservation contract should be negotiated by your lawyer to ensure your deposit is protected and you have enough time to complete the checks (due diligence and valuation) and qualify for the mortgage. Deposits range between 3,000 Euros and 1% of the purchase price.
Due diligence is carried out by your lawyer. This involves checking the property is owned by the seller, has no debts and is legal.
This is known as an AIP, agreement in principle. The offer is based on your financial situation and the property you are buying.
If you a buying with a mortgage the bank will require a valuation of the property. The Foxes mortgage team will liaise with the agent or owner of the property to organise an appointment for the valuer. Once the valuer has visited the property, it takes around 4-7 working days to receive the report.
The contract de Arras, or private purchase agreement is a private contract between the seller and the buyer where the sale is agreed. Once signed both are locked in to the purchase and can only pull out with a penalty. Your lawyer will negotiate this contract and if they have power of attorney, they can also sign on your behalf.
This contract should not be signed until the due diligence has been completed, and the valuation and mortgage are in place.
The binding offer is presented by the bank, once signed your mortgage offer is binding. This document will only be issued after the valuation and close to the purchase.
This document needs to be signed in a notary by the buyer or their lawyer. The purpose of this document is to check the mortgage complies with the law and the buyer is fully aware of the conditions of the mortgage.
The final purchase will be carried out in front of a Spanish notary. In most cases, the bank, seller, sellers lawyer, buyer and or their lawyer will need to present for the signing. Once signed the keys will be handed over to the new onwer.
An NIE or Número de Identificación de Extranjero is an identification number that any foreign person who is buying a property in Spain will need to request before they begin the purchase process. You can read more about applying here
You will need to open a Spanish bank account prior to the purchase. Your broker or lawyer can help you liaise with a bank to do this online, however, you will need to visit a branch of the bank prior to the purchase and present your official documents.
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