In the past it was generally assumed that people buying property in Spain had the
cash to do so. However that has changed in recent years as many people
are buying homes because they live and work permanently in Spain or
because they see it as a good investment. Spanish banks (bancos) and
savings banks( caja de ahorras or caixa in Cataln) too have
changed in recent years and are now much more amenable to giving
Spanish mortgages to foreigners so it is certainly something to
consider if you are intending to buy property in Spain.

One of the main advantages of a Spanish mortgage over a U.K. one, for
instance, is that generally speaking the interest rates are quite a bit
lower with different Spanish banks having different offers so it is
certainly worth shopping around.

A good idea is to ask the bank for a copy of their Spanish mortgage
offer then take this to a different bank and ask them if they can better
it- they often will. Then it is worth taken the improved Spanish
mortgage offer back to the original bank and you may well get a pleasant
surprise, Spanish banks seem to be much more flexible than their U.K. counterparts
and the competition between them is fierce.

The other advantage of a Spanish mortgage
is the fact that the banks and their bank managers are familiar with the
process of property purchase in Spain and can therefore guide you
through the procedure more simply and smoothly than perhaps a foreign
bank can.

As with the U.K. to qualify for a Spanish mortgage you will of course
have to be able to prove your income.You will need to produce wage slips
for the last 3 months and bank statements for the last 6. The self-
employed will need audited accounts going back three years plus copies
of 12 months business bank statements.

For those buying to let be warned, a Spanish bank will not give a mortgage
based on projected income from rentals.

Spanish mortgages are generally 60-80% of the property value repaid over
5,10,15 or 20 years although some banks will offer 100%. The current
variable rate for a Spanish mortgage is 4.7% which compares very
favourably with what U.K. high street banks and building
societies are currently offering. The repayments should not exceed 35%
of your net monthly income.

The recent building boom in Spain has resulted in Spanish mortgages now being
readily available and Spanish banks are keen to do business with foreigners.
Many of them, particularly in the more touristy areas, employ English
and German speaking staff and I think if you are applying for a Spanish
mortgage you will be pleasantly surprised at the reception you receive
and the helpfulness of the bank staff.

Article submitted by Ruth Polak, the owner of http://www.costadelsol-vacationrentals.com
a site specializing in holiday apartments and villas on the Costa del Sol and in Rural
Andalucia. You will also find lots of information about Spain and Andalalucia
in particular.