Getting a mortgage with a Spanish bank grants numerous benefits like low interest rates, favourable write off conditions, easier for taxpayers to sort taxes out, no expensive bank commissions caused by international bank transactions etc.

There are advantages to doing business with a Spanish bank. While this requires additional coordination the effort pays off as you can take advantage of many benefits because of Spain’s general thrust of encouraging real estate investment by foreigners. It is in the bank’s best interests to grant mortgages to foreign investors, and you do away with the risk of your mortgage lender not knowing anything about local laws.

An increasing number of people are buying property in Spain are getting their mortgage with a Spanish bank It’s not just expatriates or people moving to Spain. In fact you will see a great deal of property investors, regular visitors to Spain etc.

Most of these people go to Spain’s two leading banks, both of which have an extensive range of mortgage products.. Caja Madrid, Spain’s second largest savings bank, is known for its special low rate mortgages and the superior way of serving customers. It has an extensive network both nationwide and around the world. The second option, Bankinter, has the best electronic banking facilites available in Spain. You can try to secure a mortgage offer from both then compare packages and weigh pros and cons.

Caja Madrid

In the last few years, Caja Madrid made huge investments in its services and operations to build a reputation for high standard, personalised lending services with very competitive rates, especially for non-residents. The online banking service has significantly improved, and they give advice and service over the phone. They also have a specialised staff who have been especially trained to handle the transactions of non-Spanish speakers in their native languages.

Caja Madrid is also has a policy of giving a reply within 24 hours of receiving their mortgage enquiry (in fact it can arrive on the same day if you send the query before 2:00 pm and give a phone number). They will also provide step-by-step instructions on the loan process.

Bankrinter B

Bankinter has some of the best international e banking facilities. They provide telephone banking services in Spanish, English and German. They have Internet banking facilities and will provide it the same day you open the account. You can even open an e-account through the web. They will process mortgage applications within 2 days and have good interest rates.

Some people are really eager to live in Spain but are worried about the process of getting a residence permit? Don’t lose sleep over it … once begin the process it’s not as bad as you think, especially if you’re an EU citizen. The revised foreigner’s law, which took effect on March 1, 2003, simplifies the process of getting residency for European Union citizens.

Depending on your country of origin, after living in Spain for several years you are no longer seen as a tourist and should apply for a residence permit. This is renewed every five years.

If you want to get a residence card then go to your local police station or “oficina de extranjeros”. Since the laws can vary in every region of Spain do drop by the office to get a list of exactly what you will need to present.

Do you have to wait for a long period of time before getting your card? It depends. The duration and processing time differs from town to town and can be days, weeks or even months in smaller towns. However, you should be given a document that certifies that you have applied for residencia, which acts as a temporary residence permit.

If you’re an EU Citizen

Since 1 March 2003, there are two types EU citizens who no longer need to hold residence cards: those people who are legally working in Spain and currently paying Spanish Social Security; also, retired workers who are qualified for a Spanish State pension who have lived in Spain for more than 36 have worked in the 12 months before retirement. However the residence card is always useful as easy proof of your status so you should consider getting a document anyway.

EU citizens don’t have to show proof of income nor that they have medical insurance but should present a: completed application form, four photograph, and passport plus photocopy.

If you’re not an EU Citizen

Non-EU citizens will need proof of income, a clearance that shows you have no criminal record, a medical certificate and medical insurance from a Spanish company, your passport and photocopy; three passport-size photos; payment of fee (not high);Spanish bank statement showing income arriving from abroad; deeds to Spanish property or a rental contract, plus photocopy; and a completed application form.

You may also need to show your employer’s documents and will have to process a numero de identification de extranjero (NIE), which identifies you to the Spanish tax authorities.

Time and again you hear stories of usually logical and rational people buying up “cheap” property abroad without any consideration. They skip important steps like doing surveys on the property, or they are insensitive to the neighbours and upset everyone with their renovations. They don’t even check to see if they are within the property boundaries and then they suddenly are “surprised” to find they havetitle deed problems.

Avoid becoming scammed (or stressing yourself out with stupid mistakes) by doing proper planning and research.

The most obvious thing is to stay in budget. Always watch the level of debt you’re exposing yourself to and how you will manage the monthly payments if ever interest rates increase, or if the income you had expected to earn from rent doesn’t come through as you had hoped. Also look at whether or not you will be able to sell at a profit if the market is deflated.

This homework is dull and tedious but it will save you a lot of grief in the future.
This sounds like common sense but you should be as careful about buying a property abroad as you would if you were buying a property back home.

And finally, do not be discouraged! The lessons we can learn from the stories of people having trouble paying off their properties or learning in the middle of the process that there are more details or paperwork than they had expected doesn’t mean that the dream of having a home in Spain is beyond reach. Rather it just teaches us a lesson, that good things come to those who work for it, with their feet on the ground and their heads set on the goal, and with plenty of common sense keeping them from rushing forward at the first offer.

To give you an idea of how the dream can come true, just look at the historical increases of property prices. In the last few decades you can really see how the houses in Spain have brought not just joy to the homeowners, but lots of income. Take a look at the property prices in Malaga and Montpellier. These regions have seen a value increase of 144% over the last four years. There are many new markets that look like they can offer the same to the investors and you just have to look out for those and do your research. These are the benefits of taking the time to find the right property market.