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What does the mortgage application journey look like in Spain?

If you’ve made the wise decision to contract a mortgage advisor to help with your application in Spain, it’s helpful to know what the process involves. In this article, we walk you step by step through the journey, explaining each stage in detail. 

“While the obvious stages are the application to the bank and its acceptance or rejection, there’s much more to a loan procedure,” says Katherine Walkerdine, a founding partner at Mortgage Direct. “We have a 15-step journey, and the good news is that a qualified advisor will guide you through every stage whilst searching for the best mortgage deal for you.” 

Here is a summary of the main five stages of the process, which may vary depending on which company you instruct:

Stage 1 – initial steps 

Once you have contacted a mortgage advisory company, your application will be placed in the capable hands of a designated mortgage advisor. They take note of your requirements and circumstances, such as details of the property you want to buy and your financial situation. Your advisor will also make an affordability assessment and provide you with a no-obligation quote for their services based on the latest market conditions and deals from the banks. If you accept it, you pay an initial fee and sign the company’s terms and conditions. 

Expect this stage to take 2 to 4 days.

Stage 2 – presentation of the application 

Your adviser will require from you a complete set of documents required to make your application. Once they are in the hands of your adviser, they will present your application (s) to the most suitable lender (s). This is the most important part of the process. Your adviser is an expert in presenting Spanish mortgage applications to banks and will present it in a clear and concise manner in order to get the quickest and most successful results.

Expect this stage to take 7 days provided the documents presented to your adviser are complete.

Stage 3 – acceptance or rejection 

The ball is now in the lender’s court to respond to your application. Once your advisor knows the outcome, they will present it to you. If the bank has approved your application, you will receive the mortgage conditions in writing and you will pay a second fee to your advisor (usually 0.6% of the amount you are borrowing). 

If, on the other hand, in the unusual event that the bank has rejected your application, your advisor will explain the reasons and you will receive a refund of your initial fee. This happens very rarely as the advisor has already assessed your case at the outset (and sent a no-obligation quote) before presenting it to the bank with the documentation. 

Expect the bank to take 7 to 14 days to respond, although more complex or larger transactions may take longer.

Stage 4 – valuation of the property

Next, your mortgage advisor can assist you in requesting a valuation of the property you wish to buy using a tried and trusted valuation company. “We have built up a network of trusted valuers in different parts of Spain,” says Walkerdine, “whose professionalism and competence ensures a well-executed valuation nearly every time.”

Expect this stage to take up to 14 days

If the valuation is suitable, the bank will send you an offer letter, known as a FEIN (Ficha Europea de Información Normalizada in Spanish), detailing every aspect of your mortgage loan. From the point of signing and submitting this document to the notary platform, you have a 10-day cooling-off period (15 days in Catalunya) during which you cannot sign the purchase deed. 

Expect this stage to take up to 7 days.

Stage 5 – completion 

During the cooling off period, you will need to arrange an appointment at the notary to sign the “acta de Transparencia”. This is an important part of the mortgage law where the notary will also explain the key details of the mortgage agreement. Once the 10 or 15 days have past, you can go back to the notary and sign for your mortgage and buy the property. Note that completion must be at least 24 hours after signing the acta

You then proceed to the purchase when you and the vendor will sign the title deeds, and you and the bank will sign the mortgage deeds. 

At Mortgage Direct, we calculate that a completed and successful mortgage application takes 8 to 12 weeks. Don’t forget to factor in this timeline when planning your purchase!

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
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