Borrowing a mortgage is something that we are going to have to do sooner or later. Unless we manage to save the almost 200,000 euros that on average are needed to buy a 100 m2 home in Spain, according to Idealista data. The household savings rate was 18.9% in the second quarter, while the national average salary is 1,701 gross euros per month, according to Adecco. This means that, on average, the Spanish save 323 gross euros per month.
A citizen would take 51.5 years to buy a house of 200,000 euros with that level of savings, since 323 gross euros per month is 3,876 per year. It is a chimera that the citizen thinks that he will be able to buy a house only with the savings generated through an average salary. And let’s not say in Madrid or Barcelona, where the same 100m2 apartment is close to 300,000 euros. That is why we all need the support of a financial institution to have a home of our own.
Applying for a mortgage is not complicated. However, it is a process that we do not pay attention to until we have to apply to buy a home. There are several issues of commissions, requirements, interest rates and steps to complete which is important to keep in mind. Let’s see what to do to apply for mortgage loans and have them approved in Spain.
Request a mortgage: requirements that the bank wants
How much have you saved to pay the full price of the house? That is the first requirement that the bank will ask us, since the most normal thing is for entities to finance up to 80% of the value of the home. This means that you must have at least 20% of the total amount.
It is also necessary to have money to finance the expenses associated with the acquisition, whose cost is equivalent to 10% of the value of the property. In this section we refer to the expenses of notary, registration and taxes related to the purchase of the property.
The more we save to pay the full amount, the better, since we will need to borrow less money. This means that we will reduce our risk profile and obtain more favorable conditions, as lower interest rates.
The next step is demonstrate that we have sufficient and recurring income to be able to pay the monthly installments. The Bank of Spain recommends allocating a maximum of 35% of income to repaying financial debts, an expense that includes mortgages. Have a job stable gives the bank greater peace of mind that we are going to meet our obligations.
Other requirements are demonstrate a good credit history that indicates that we are not on any list of defaulters, or present a guarantor who has assets that serve to guarantee that it will honor our debt in case we do not meet monthly payments.
Applying for a mortgage: fees they can charge
The mortgage includes a series of commissions that must be taken into account. One of the most common is Opening commission. It is a percentage of the amount requested for the processing of the loan. It is usually between 0.5 and 1% of the mortgage, this means that if you ask for 100,000 euros and you have an opening commission of 1%, you will have to pay 1,000 euros for the processing. The usual thing is that the minimum amount is 350 or 500 euros. It depends on the bank.
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