Mortgages

Property with an existing mortgage. All mortgages contracted on a property are registered with the property at the land registry office. If the property you are interested in acquiring is mortgaged, the details of that mortgage will therefore appear. In most cases the owners have met their obligations with the landing financial institution and the process is simple: The outstanding amount due to the financial institution will be paid directly to them the day of completion. This quantity is being paid out of the total purchase price and deducted from it so the owner will only receive the difference. After the balance from the mortgage has been paid, the financial institution will sign the mortgage cancellation thereby clearing the debt against the property and allowing you to proceed with the purchase.

Taking over an existing mortgage . Should you be interested in taking over the existing mortgage from the owner, you will need to meet with the financial institution to discuss the conditions of the mortgage and submit a formal application. Once the financial institution has received all the information, you should get an answer within the next 10 days.

Contracting for a mortgage. Should you prefer contracting a mortgage with a financial institution of your choice, in addition to the personal information you need to provide as part of your application, it is necessary to perform an appraisal of the property. The personal documents you will be required to provide includes:

• Photocopy of your passport
• Your Spanish NIE number and application form if you have not been assigned one yet.
• Your last income tax statement
• A copy of your work contract stating your salary and years of employment with them
• A copy of your last 3 paycheck

Depending on your personal situation, additional information might be required. However, the above list is mandatory in all cases and any additional documentation requested will be explained to you by the financial institution at the time of application.

Appraisal . As part of the process for contracting a mortgage with a Spanish financial institution, a formal appraisal or evaluation is required. The bank will contact the appraisal firm directly and will make arrangement for site visit. The fees applicable to the appraisal of the property will be invoiced directly to you by the bank and are not refundable in any circumstances. The final appraised value is a reflection of its market value in consideration of other similar properties within the area, state of conservation, age, size and services available to it. It is normally within 10% of the purchase price.

If you are interested in obtaining an official evaluation for the property but not wanting to contract for a mortgage, the most effective way to do so is to apply for a mortgage with a financial institution. You will then benefit from the preferential rate for appraisal by the bank and will get a complete appraisal report on that property within 15 days of site viewing.