Getting a Spanish mortgage after Brexit – what to do …

We reproduce them in full below.

Will I still be able to get a Spanish home loan after Brexit?

“As a non-resident, provided you have proof of income and a solid credit history, you will be able to get a mortgage for the purchase of property in Spain after Brexit. From our conversations with many Spanish banks, we are led to believe that nothing will change much – however, the criteria are already starting to tighten in some areas regarding lending, and at Fluent Finance Abroad we are considering many other changes to come.

For example, some banks now even limit lending to a maximum of 60% of the loan-to-value ratio for associated customers in the UK. Others are a little more generous. Basically, it depends on internal assessments of the new loan risk presented by Brexit and the acceptance of UK mortgage applicants.

Credit risk is subject to constant review within banks and, as part of these reviews, banks’ appetite to accept risk is modified and managed accordingly. So while it may seem like not much will change, what does change could have a profound effect when trying to get mortgage approval.

If I want to take out a mortgage, what kind of consumer protection is in place to prevent me from being falsely sold an inappropriate mortgage product?

“We have been asked this question several times. With the introduction of the Mortgage Credit Directive (MCD) adopted by the European Commission in February 2014, this mainly aimed to prevent irresponsible lending and borrowing behavior within the EU, and thus potentially to protect anyone wishing to obtain a mortgage.

As you can understand this is an EU directive, so although the UK may continue to observe and comply with the EU system, inevitably, over time, differences will emerge between of them. So after Brexit and longer term things will start to differ and confusion and misinterpretation of consumer rights for UK customers could become a problem.

Fluent Finance Abroad is fully qualified and regulated by the Bank of Spain under the ley de creditos inmobilarios LCCI 5/2019 with a company number registered with the Bank of Spain of D305. We are fully licensed and follow all rules and regulations governing consumer protection. This may not seem particularly important, however, it is absolutely essential when it comes to ensuring your security when obtaining a mortgage in Spain.

Our advice is to never try to get a home loan from an organization that is not regulated.

I already have my Spanish residence, so how much can I borrow and are there different eligibility criteria?

“If you have a Spanish residence and pay taxes in Spain, the general rule is that you will be able to borrow up to 80% of the loan value / property value. This is the norm for most Spanish lenders, but there are times when you can borrow a little more than the 80% norm.

The rates are better as a Spanish resident than for loans to non-residents. For example, the best deal we were able to get recently was a variable rate mortgage with a spread above the Euribor by 1 point (Euribor plus 1).

Fixed rates remain very attractive to many customers, and we currently offer a fixed rate offer of 1.79% over 20 years, provided you purchase life and home insurance from the lender.

To be considered a Spanish resident for loan purposes, you will usually need to prove that you have been reporting income in Spain for at least two to three years, depending on the lender. Some lenders would consider a shorter period, but you will need to be a Spanish taxpayer under all circumstances. “

Once I buy the property, will I still be able to rent it out after Brexit?

“Yes, you will be able to rent the property in the same way as before Brexit, as long as it has the right short-term rental license. Remember that each of Spain’s 17 autonomous regions has its own rules and regulations in this regard, so be sure to seek professional advice. Long-term rentals do not need to be authorized in the same way.

Will I have to pay more tax on the rental income from my property?

“As we currently understand, from 1 January 2021 there will be a slight increase in the rental income tax for UK landlords, which is the tax paid by all non-EU citizens, which is currently levied at 24%. ”

How long will I be able to stay in my Spanish property as a non-EU resident?

“To date, there are no clear rules regarding how long a UK citizen can stay in their property in Spain after Brexit. Under the current rules for non-EU people, you have the option to stay in Spain and the Schengen area for up to 90 days out of a 180-day visa-free period. Now we have no more information. As soon as we have it, we will let you know.

If, however, you invest in real estate over 500,000 euros, then you will benefit from a non-EU citizen Golden Visa which allows multiple entries into Spain for the whole family, although certain conditions apply. . Another advantage of the Golden Visa is the ability to visit Spain only once a year if you wish, while retaining the Golden Visa. This visa must be renewed every two years.

Can I get my Spanish residence if I buy a property before December 31, 2020?

“Under the Withdrawal Agreement, all UK citizens who register to reside in Spain before December 31 have the right to live in the country with the same rights as EU citizens. In July, the Spanish government introduced a new residence card for UK applicants called TIE, the Tarjeta de Identidad de Extranjero, a biometric residence card that will prove your rights under the Withdrawal Agreement.

You will need to prove that you plan to stay in Spain for the long term and have a copy of your property’s title deeds or a long term rental agreement. Before you can secure this card, you need to meet a number of criteria regarding income, health care, bank funds, etc. which of course depend on the circumstances of each applicant.

If you would like to apply for residency in Spain after December 31st, we anticipate that there will be different immigration procedures to follow, but details are unknown at this point.

For more information on any of the issues raised, you can contact Fluent Finance Abroad on +34 952 85 36 47 or contact us via [email protected]

About Deborah Wilson

Check Also

Actor Sahil Vaid, more than just a funny friend – The New Indian Express

Express press service Ayushmann Khurrana, the man with the Midas touch in Indian cinema right …

Leave a Reply

Your email address will not be published.