If you are buying your dream home with a mortgage from a Spanish bank, you should be prepared as the process will take some time and banks will be extremely strict with having all documentation in place. Preparing early and having your mortgage in place, will make the process much easier and give you peace of mind.

Buying property

The bank in Spain will typically request that you submit specific documents with your application, although a dedicated person from the bank’s customer relations will help you throughout with your documents and make all the necessary arrangements.  It is usually expected that you will provide a copy of your passport, proof of address documentation such as a utility bill, an NIE certificate, if you are employed, they will need at least 2 of your last wage slips, your annual tax statement, and 2 annual tax returns, last 2 years annual accounts, an accountant’s or employer reference, credit report, last 3-6 months bank statements, mortgage or rental agreement relating to the main residence. Whatever they require, they will first assess it and then they might respond with potential questions. After this, they will offer you a provisional approval on the condition that your property is valued, and it corresponds to the amount you are asking. The valuation takes a week. The bank branch submits your application to their risk department for a final approval which will be provided in writing.

Building a house

A similar process is followed if you are building  a house, as the value of your land and projected costs for a house will be assessed and cross-checked by a professional surveyor who will visit the location and provide their valuation to the bank.  By this time, you will need to have had architectural plans approved by the building authority and have a general estimate of your overall costs, so you present the bank with a clear and realistic number. If you do not manage to do so, this will create delays and more paperwork, so it is good to have a clear communication with your bank from the start and understand what is needed. Whether you are signing your contract with the bank or an independent third party will evaluate your property, you will be required to cover the costs. This will also include any fees for lawyers, especially if you do not speak the language, as the bank will arrange for a lawyer to be present to translate any papers you need to sign.

Total costs

The total costs of buying a property with a mortgage could be around 3%, as you will have to pay an arrangement fee (1% of loan as standard), valuation fee (approx. €500.00) and mortgage stamp duty (around 1.1%).

The interest rates in Spanish banks are attractive and relatively low, with an average rate around 2.75%. It is important to consider that banks now might offer a loan that covers only 60% (non- residents) to 80% (residents) of the purchase price or of the appraised value of the property (the lowest value prevails).

When buying a finca or rural property the maximum mortgage will be 60%. The rest you will have to finance yourself with your own resources, whether that means you need to increase your mortgage in your home country or with personal savings.

Spanish banks also take into account your family situation, whether you rent your home or have your own property, number and age of children, type of work, income, etc.

When applying for a mortgage in Spain, banks will look at the relation between your income and debt to assess your situation and decide how much you are able to pay per month. For example, the bank will consider around DTI of 30-35% (up to 40%) and for non-residents, the accepted DTI will be 25-35%.

If you are a British buyer, a currency specialist such as Universal Partners FX can help you navigate the current market while taking into consideration your specific needs, goals and your budget.

When considering buying your dream home in Spain, Universal Partners FX can give you peace of mind when sending money overseas. If you want to schedule ahead and safeguard your funds, talk to one of their foreign exchange experts today.

 

Buying your home in Spain is a dream come true, but there are many important things to consider when it comes to buying and transferring funds from the UK to Spain. Since buying a property involves taking into account the actual price of the home as well as any related costs such as paying taxes and fees, which can be as high as 8 and 15%, it is vital that you consider your finances, minimise your expenses and have a solid plan with a forex broker.

Costs to consider

It is important to work out your budget for buying your property, taking into account all of the related costs. One of the first things to consider is the property transfer tax which is around 10% of the purchase price and every region in Spain sets its own one. For example, in Andalucía, a property that costs up to €400,000 will have a property transfer tax of 8%, whereas over that and up to €700,000, you will have to pay 9% or 10% if the property costs over €700,001. But this is not all. When you buy a home or a plot of land, you have to register with the land registry, so you get your deeds. The fee for this can be €500.00 for a property of €100,000.

When you are signing your contracts and buying property this is conducted in the presence of a notary who will also charge a fee to verify the documents and the act taking place. Again, the notary fees depend on the price of a house, so for a €100,000 property, you will need to pay €800.00 for fees.

When you are buying, you will also need a solicitor to represent you and whose fees will be around 1% of the purchase price. Also, you will have to pay the commission of the estate agent, if there is one, and it is usually included in the property price.

How to Save Money

As always, getting some extra help from experts could relieve some stress and save you money. A very useful thing to do is contact an estate agent who knows the area you want to buy in well and who can give you more insight, help you understand market prices and explain the process of negotiating a price further. They might save you a lot of money by explaining the right price for a specific purchase and help you have the upper hand in the negotiations by providing valuable background on the purchase.

Additionally, someone who speaks the language and who can explain the process, such as a lawyer who can act on your behalf and elucidate complex legal issues, is a great asset. They will be able to point out things to watch and avoid such as illegal property building or planning which might cost you money to resolve later.

Paying with cash is always a great advantage as you can pay less and is something to consider if you are willing to do so.

A useful point to consider is paying for a survey of the property to make sure there aren’t any underlying problems and ensure that the structure of the house is solid, otherwise, if there are issues you can negotiate a lower price or save yourself the trouble and money.

Use a currency specialist

Transferring sterling to euro can cost you bank fees. To avoid unnecessary expenses, it is wise to use a currency transfer specialist such as UPFX that they can transfer funds for your purchase. Not only will they offer you competitive exchange rates, but they will make sure that your funds are protected from currency fluctuation.

When you are buying, it is good to consider buying offseason, negotiate the price and get a special deal and be open to change your requirements and find something that is much cheaper. You might be surprised at the opportunities you might find when taking a step back and looking at locations or properties you may have not considered before.

If you are a British buyer, and want to secure a strong investment opportunity, now is the time to get in touch with your currency broker. A currency specialist such as Universal Partners FX can help you navigate the current market while taking into consideration your specific needs, goals and your budget.

When considering buying your dream home in Spain, Universal Partners FX can give you peace of mind when sending money overseas. If you want to schedule ahead and safeguard your funds, talk to one of their foreign exchange experts today.

Life after Brexit might seem uncertain, but for many Brits the decision to buy property in Spain is a certain fact. While there might be certain changes in terms of British citizens’ rights with perhaps more documentation and bureaucratic controls, the promise of a sunnier climate and a richer lifestyle is definitely a key factor when moving to Spain.

UK nationals living in the European Union

As the government notes, continuing to live and work in the EU after Brexit would be influenced by each country’s rules and regulations. If you are a resident in Spain, you should register as one, as well as register for healthcare. You should also check if your passport is still valid for travelling and exchange your UK driving licence for a Spanish one.

Buying property in Spain

Buying property can be a very hard decision and a very complicated process. But if you have done your research and sought out the right people to offer support and guidance, you will easily navigate all the complexities and be prepared for any unexpected changes. For one, getting legal advice from an independent lawyer who had good knowledge of Spanish land law (urbanismo), will help you when dealing with developers or estate agents. In this respect, you will be protected from fraud and you will safeguard your interests and finances. While you might be very excited buying or building your own home abroad, being careful with the individual agents and lawyers, and always looking after your own interests is very wise in order to avoid disappointment.

The same goes with the Spanish notary public who will offer legal advice, prepare the contract and issue the public deeds. You might prefer to work with a British estate agent but ensure that they are reliable and registered with the Law Society in the UK. If you are looking for a lawyer or translator the government’s website has qualified professionals on their website.

If you need more assistance with the language and communication, especially when signing a contract, you will need to get an independent translator by checking the Spanish Ministry for Foreign Affairs website.

Things to do before transferring money to purchase the property

Before you buy the property, make sure you check the land registry extract (nota simple), so you know that the sellers are the same with the registered owner(s) of the property and land. It will be wise to check that there are no debts or charges, including a mortgage or any legal proceedings against the particular property. Documents such as the planning permissions and the property itself should have all licences and permissions.

In any case, having the property surveyed by a chartered surveyor would be the best route when you want to have everything in order without worrying. When you purchase the property you will pay tax, so you should know the cadastral value of the property and how much purchase tax will be due.

Check important documents:

First, make sure that the previous owner paid the owner’s annual property tax (IBI), by seeing the receipt. The town hall should provide a certificate proving that there are no unpaid rates from previous years.

You will need to get the cadastral certificate (with boundaries and size of your plot) that must correspond to the Land Registry records. You will need a habitation certificate to connect the electricity and water companies, as well as a receipt to prove all utility bills have been paid. You might also need a certificate signed by the President of the Community of Property Owners stating that there are no outstanding debts.

From 1 June 2013, all homes for sale or to let in Spain need an energy efficiency certificate, so ensure that the seller has this certificate. Once you get all documents, you should register the property in your name with the Land Registry.

Transferring funds

When you have all the papers in order, you would start thinking about transferring your funds from a UK bank account to a Spanish account to pay for the property. Transferring large amounts of money can be stressful, so getting in touch with a reliable foreign exchange specialist such as Universal Partners FX will protect your funds and save you time and money. UPFX have many years of experience in the currency market and can provide the best tailored solution for your money. Get in touch with them today and find out how they can help you make the most of your money.

Buying property in France or Spain has recently been complicated due to Brexit. For many Brits already living there, there are still many questions, a lot of them related to health and access to medicine. The possibility of a no-deal Brexit overcomplicates things too. Let’s see what a no-deal Brexit involves and what it means in terms of health for the many Brits who already live or want to move there.

What is a no-deal Brexit?

No deal means that the UK would leave the European Union (EU) without any agreement about the status of their future relationship. In a matter of fact, it would immediately be left out of the single market and customs union, and consequently lose its privileges of trading between EU members without complex checks and tariffs (on imports). But this will also have a massive impact on other facets of our lives steeped in European institutions and regulations. We will leave the European Court of Justice and Europol, its law enforcement body, and lose our membership of many other EU bodies including the European Medicines Agency (EMA) responsible for the evaluation and supervision of medicinal products. 

While Theresa May has strived to pass her Brexit deal through Parliament, a deal which would at least ensure that the UK would be guaranteed a 21-month transition period to organise the situation and have time to negotiate a trade deal, this is now not the case. On the contrary, with PM’s Boris Johnson’s declarations of leaving the EU with or without a deal, the possibility of a no-deal Brexit is back on the table.

No-deal Brexit

Leaving without a deal means that the 1.3 million Brits living in the EU are suddenly left in a very complicated situation. By crashing out of the EU, means leaving behind the institutions that have for all these years protected us and given us security, health insurance and various other agreements that benefited us and guaranteed our smooth stay abroad.

If you are going on holiday, the government has advised that you buy travel insurance before you leave. However, if you are living abroad, Spain has already agreed to guarantee continued healthcare access to tourists and British expats until the end of 2020, provided that the UK grants Spanish living in the UK the same rights.

In France, things are more complicated, especially for those that spend six months of the year there. Both British and French governments have advised British expats to apply for a Carte de Séjour residency permit, however, many prefectures have halted applications until Brexit becomes clearer.

According to The Local,  both governments are willing to come to an agreement on healthcare as many French people live and work in London, and many Brits live and work in France. Unfortunately, no bilateral talks can officially begin unless Brexit has happened.

For many Brits, the idea of facing medicine shortages and feeling totally helpless is a nightmare. Many have said that, diabetics are stockpiling supplies of insulin by giving themselves less on a daily basis” to avoid dealing with shortages in the possibility of a no-deal Brexit. As Euractiv reported, “many of Britain’s 3.7 million diabetics, who include Prime Minister Theresa May, depend almost entirely on insulin imports from continental Europe.The hormone, which is usually produced by the pancreas, helps diabetics regulate their blood-sugar levels. A no-deal Brexit would almost certainly mean re-establishing customs and health controls, which could lead to delays at the border.”

But as the UK, Spanish and French governments are willing to alleviate any problems and help European residents and expats get the healthcare they need, they will hopefully be no problems in the case of Brexit.

As you are deciding to buy property abroad and worry about currency volatility and political events such as Brexit that cause unpredictable market movements, it is a good idea to get in touch with a foreign exchange expert and discuss your money transfer needs. Universal Partners FX have years of experience in the foreign exchange industry and can offer assistance when making regular payments abroad and sending large amounts of money internationally.