Tancrede de Pola (OP Columnist)
IT can be astonishing how lightly some house hunters take purchasing a property in Spain.
Whether you’re looking to retire, invest in a rental home or simply want a holiday hideaway, one mistake is all it takes to ruin everything.
Here are some basic steps that every prospective homebuyer must take before parting with their hard-earned cash.
Do your research
Don’t rush into anything.
Visit the area where you’re thinking of buying and explore.
Check out the local amenities, shops, bars and restaurants and gauge whether or not you think you could fit into the local community.
And, obviously, never buy without viewing.
If the home is off-plan, look into the developer and make sure they have a good reputation.
Research if their previous projects were built well and on time.
Hire local experts
Without tooting our own horn, mortgage broker’s like the Finance Bureau are essential to ensuring you get the best loan possible.
We have good relationships with the lenders and can highlight all the hidden fees and clauses that may trip you up later on.
Have in mind the type of mortgage you want and your broker will advise as to the most suitable, given your circumstances.
You will also want an independent lawyer to carry out all relevant checks and searches, even if the property is a new build.
In Spain, you should expect 11-16% of costs to go on completion fees.
Have your finances in order
When applying for a mortgage it is imperative that you can clearly demonstrate that you have the funds (typically 30% + closing costs) available for completion.
Start running your bank account as if you already have a mortgage at least three months before you apply – Avoid excessive spending, cut out subscriptions and memberships that aren’t essential and don’t splash the cash on betting or gambling.
And don’t apply for new credit around the time you are trying to get a mortgage, you may be considered a greater credit risk if you do and this new lending will be taken into account when the Spanish bank calculates ‘affordability’ for the new loan.
Try to improve your credit score before applying, one tip: put all expenditures on a credit card and pay it off in full each month, ensure you are on the electoral roll.
Be aware that the fluctuating exchange rate may mean your foreign income will not go so far at some times and monthly mortgage payments will go up if being transferred in pounds.
