Mortgages for non-residents in Spain are an important financial option for foreigners or citizens who do not meet the requirements for residency in Spain.
These mortgages allow people of different nationalities to obtain mortgage loans to purchase property in Spain, regardless of their tax status in the country.
However, applying for a mortgage as a non-resident entails specific conditions and requirements.
Requirements to obtain a mortgage as a non-resident
Mortgages for non-residents have more stringent conditions compared to mortgages for Spanish residents. This is due to the fact that, in the event of default and non-payment, the recovery of assets by financial institutions may be more complicated in the case of foreigners without residence in the country.
Next, we will examine the key conditions that non-resident mortgage applicants must meet:
Percentage of financing for non-residents
The percentage of financing granted for mortgages for non-residents is generally around 70% of the value of the property, while for a resident it is 80%. In other words, applicants must contribute 40% of the purchase price of the property as part of the down payment.
This means that clients interested in obtaining a mortgage must have significant savings to cover initial expenses, such as the deposit and other associated costs.
Amortization Period
The amortization period is usually limited to a maximum of 20 years. This is shorter compared to mortgages for residents, which is usually around 30 or even 35 years. Shorter terms may result in higher installments, so you will need to factor this into your budget.
Interest rate
The interest rate applied to mortgages tends to be higher compared to mortgages for residents. This is due, in part, to the additional difficulty for foreigners to comply with the contracting of linked products, such as the direct deposit of their salary.
Opening commission
Some banks may apply an origination fee to mortgages for non-residents, which is usually around 0.5% of the loan amount. This commission is not charged to residents or foreigners with residency.
Are you a non-resident and want a mortgage? Required Documentation
Applying for a mortgage as a non-resident in Spain involves the presentation of a series of documents that support the application and comply with the requirements of the financial institutions.
Photocopy of NIE or Passport
The application for a mortgage for non-residents will require the presentation of a photocopy of the NIE (Número de Identificación de Extranjero) or Passport. These documents are essential to verify the applicant’s identity and status as a non-resident in Spain.
Certificate of non-residence in Spain
An official certificate stating that the applicant is not a resident of Spain is a fundamental requirement. This document must be provided by the competent entity in your home country and confirm your non-resident status.
Documentation of marital status
You must present a document proving your marital status, that is, if you are single, married, divorced… If your legal status is separated or divorced, you can request a copy from the lawyer who carried out the process.
Employment contract
You must present an employment contract proving your employment status in the country of residence. This may be necessary to assess financial stability and your ability to meet mortgage payments.
Last 3 pay slips
The last pay slips obtained in your country of residence will be requested. These pay slips will provide information on regular income and serve as proof of ability to pay. You can request a copy at your place of work or submit your last year’s income tax return.
Annual and quarterly VAT returns
If you are self-employed, you will have to file annual and quarterly VAT returns to prove that you are a solvent person.
Bank statement for the last year
Last year’s bank statement, where your income is entered, is an important document to evaluate your financial health and transaction history.
Tax return
A tax return is necessary to understand your tax situation in your country. This helps the lender to assess your ability to comply with tax obligations related to the property in Spain.
Tax residence certificate
A certificate indicating tax residency is essential. This helps the financial institution to understand your tax relationship with your country of residence and with Spain.
Contrato de compra de la vivienda
The contract of purchase of the property in Spain must be provided as proof of the real estate transaction. This document is essential for the mortgage application.
Last three outstanding debt receipts for non-residents
Presenting the last three receipts for outstanding debts that have been cancelled is necessary to evaluate your ability to pay and your credit history.
It is important to note that, in many cases, the required documentation must be translated into Spanish and submitted in person. However, some financial institutions are accepting scanned documentation, which facilitates the process for applicants residing abroad.
Mortgages for non-residents in Spain offer an opportunity for foreigners or citizens who do not meet the requirements for residency in the country, allowing them to acquire property in an attractive location, such as Fuerteventura. However, it is important to be aware of the specific conditions and requirements associated with these mortgages, which may be more stringent than mortgages intended for Spanish residents.
Despite the more demanding conditions, non-resident mortgages can be an attractive option for those wishing to invest in property in Spain. If you wish to buy a property in Fuerteventura, Destiny Home can help you with both the purchase of the property and the financing.
