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Foto del escritorAlan Sánchez

Real State investments in Spain

Everything you need to know before investing in Real State in Spain

We are in a unique historical moment for many reasons: it is a different environment that is not comparable to what we have experienced so far. COVID has changed and will continue to change our economy and the way we live and interact with each other. Investing in Real State At this current moment, investing in real state; particularly in homes for rent, continues to be the safest and most profitable investment, especially in Spain and more so in our beloved Costa del Sol. The demand for both purchasing and renting is high and constantly growing, making the value to rise at a reasonable and constant pace. The best tool to buy, and lower the cost of the investment, is still the mortgage loan: the new Spanish Mortgage Law (5/2019) came into force 2 years ago, on June 16, 2019. It has radically changed the regulations, adapting them to European guidelines, enhancing legal security and transparency, in favor and protection of the consumer. In addition, the costs of the transaction are significantly reduced: now it is the Bank that pays the AJD tax on the mortgage, as well as the Notary, the Registry and Management; while the client only has the cost of the appraisal (an average saving of approx. 2,500-3,000 €). Spanish banks The Spanish banking market today is made up of more than 30 Financial Institutions and Banks, which offer specific financing and mortgage products for the acquisition of properties. The offer is varied and complies with the rules and limits determined by the EU regulations. Mortgage rates in Spain The most important thing to bear in mind is that interest rates have never been as low as they are now. The 12-month Euribor remains negative below -0.40% and close to -0.50%, and this allows us to offer the consumer, within a standard mortgage, both at a fixed and variable rate, the lowest interest rates in history. We are talking about interest rate conditions of 1% for mortgages for regular housing and 2-2.5% for mortgages for holiday or vacational homes. This means that, today, investment in rental housing, financing the highest possible % of the acquisition price, is the most profitable in the last 30 years. For this reason, many foreign investors come to Spain, especially from the Euro zone, with the possibility of combining a good investment with the privileged surroundings of sun and sea that our coasts offer, especially the area of Malaga and Marbella. It’s the first step when you are thinking of buying a home using a mortgage loan. The pre-approval process helps you determine exactly how much money you are qualified to borrow, as well as the terms you can be offered. And, although your pre-approval is not a binding agreement, it allows you the means to make a reliable offer on a home. How to get a Spanish mortgage for non-residents The process of obtaining a mortgage is long, and has loops after the pre-approval. The average is waiting time is 6 weeks, since the terms have been lengthened to guarantee more information and transparency to the consumer. Before the new law you only went to a Notary Public once, now you have to go two times, and within a minimum period of 10 days. The best thing is to be prepared, well organized, and advised by professionals.

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