Wednesday, July 20, 2022

As a foreigner, how can I apply for a Mortgage?

There are some differences between ordinary mortgages for foreigners or Spaniards residing in another country. Compared to 80% of the loans, it is allowed to finance up to 70%, the interests are usually higher and a good set of documentation is required. However, these profiles can also access bank financing. All the information about it below:

What is the reason for the differences in mortgages between foreigners and non-residents?

Mainly, for banks, recovering loans without repayment is more complicated. The bank has less means if the borrower's fiscal residence is in another country and therefore less means to take action against the borrower in case of breach of this contract. Therefore, they are considered higher risk products than ordinary loans, that is, there are a set of differences that must be understood.

Tax residence and its importance.

When buying a house or applying for a mortgage in Spain, it doesn't matter if you are Spanish. In other words, the important thing is where we pay our taxes; our tax residence.
It is quite easy to get an ordinary mortgage if we are tax residents in Spain. On the contrary, if our fiscal residence is in another country (whether we are Spanish or not), we have more difficulties in accessing the usual credit, so we have to apply for non-ordinary mortgages called "mortgages for foreigners"
Most Spanish banks offer these mortgages since they are designed for people with tax residence in another country. However, according to current legislation, it is easier if that tax residence is located in the euro zone.
Differences between mortgages for residents and non-residents.

Each bank and each product that can be mortgaged have their own characteristics. However, in a large number of cases, for this type of mortgage there are a variety of common factors, which will affect the interest to be paid and the repayment period.

How much money is obtained with a mortgage for foreigners?

Keep in mind that a foreign mortgage loan does not tend to exceed 60%-70% of the value of the home. On the contrary, for a normal mortgage the loan usually exceeds 80%.
In other words, if you access financing through these mortgages, it means that we can save between 40% and 50% of the price of a house.

How much interest is paid on a mortgage for non-residents?

Mortgages for non-residents are usually intended for second homes, therefore, interest is higher than in ordinary mortgages.

What documentation is necessary for a foreigner when requesting a mortgage?

One of the most interesting and important parts is the documentation that must be completed to complete the mortgage process. The information and documentation below is what banks ask for:
• Translated information is not always requested, it depends on the bank and the language in which all the documents come.
• The tax declaration.
• Photocopy of the NIE or passport.
• The last three receipts of canceled outstanding debts.
• The tax residence certificate.
• Copy of the employment contract.
• Certificate that proves that you are not a resident.
• Copy of the latest pay slips from your country of residence.
• The bank statement for the last year of the account in which the payroll is deposited.
• The purchase contract of the home to be purchased or the deposit contract if you do not yet have the purchase contract.

With residence in Spain, how can a foreigner request a mortgage?

As has been said previously, when requesting either an ordinary mortgage or a mortgage for foreigners, it absolutely depends on the tax residence. That is, the nationality of the applicant does not matter.
If you are a foreigner and have tax residence in Spain, you opt for the same mortgage method as any Spanish citizen. Apply for a normal mortgage at the bank that interests us the most, to find the mortgage that best suits our interests and needs, the most important thing is to compare mortgage loans.

Do you live abroad, but want to buy a house in Spain?

A good option in this case is to contact a service in which you can mediate for non-residents, such as In this link you will find all the information on what you must do to buy a house in Spain or look for a mortgage. We help to search for and analyze needs and preferences for a particular case.