Legal Documents and Finance
STEP 5.- OBTAINING YOUR N.I.E. NUMBER:
Many of you will be wondering what a N.I.E. number is. N.I.E. stands for "Número de Identificación de Extranjeros" which translates to Foreigner's Identification Number. This document is obligatory for all non-residents that wish to purchase a property in Spain and must be obtained before taking title. This document is for tax purposes, duly identifying you before the taxman. It is a fairly straight forward procedure. All that is required from you is your original passport and a form that must be presented at the police station. From there it usually takes between 8 and 10 days to receive your N.I.E. number.
STEP 6.- FINANCE:
Unless you're one of the lucky ones, some kind of loan is vital for the purchase to go through but even here, we can advise you as we are in contact with major banks here that will offer you the best conditions available depending on your particular financial situation. As a non-resident you are generally eligible for a Spanish mortgage of up to 70% of the property's value at completion (if purchasing off plan) or of the official value of the property (if purchasing a resale property). Arranging a mortgage is quite a simple task and very little is required from you in order to receive a quote. As a guideline, we have outlined the paperwork any bank is likely to request from you:
Employed Persons: Self Employed Persons:
Passport Passport
Last P60 One to two years accounts certified by your accountant
Last three payslips One to two years bank statements
Three to six months bank statements
Of course, certain banks may request more information from you such as your Experian file or Irish equivalent to gain more insight into your financial background and repayment possibilities. Before the bank can make you an offer a property valuation must be carried out. Your mortgage can then calculated based on the results of the property valuation. It is up to you as the purchaser to pay for this valuation but do not be alarmed as it is not too costly. Once your mortgage has been approved and you are happy with the conditions you must open a bank account at that branch to facilitate the monthly repayments. You will also be responsible for the opening charges of your mortgage (approximately 1% of the loan).
If you are buying off plan, you may opt to take over the developer's mortgage (subrogar la hipoteca) that is already in place. You will still be required to submit paperwork to the bank but you may find the conditions offered are more optimal, as certain set up fees would have already been paid for by the developer upon formalizing the Developer's Loan with the bank. The bank will inform you of the mortgage amount currently on the property but you do not necessarily have to take on that amount. You can renegotiate the conditions of the mortgage the developer has established with the bank. You would only have to pay the expenses and taxes that arise from formalizing this contract. Even though this option is open to you, it isn't obligatory and you can always take out a mortgage of your choice, the developer being responsable for all cancellation fees of their mortgage which should be done before a Notary Public moments before you sign the title deed for the property.
There are other products that form part of your mortgage and these include House and Life Insurance which we'll touch on again at a later stage. There may be other products that you must take out such as credit cards, standing order etc depending on your bank but by doing so your mortgage conditions may be improved slightly so in the end these products work to your advantage.
The banks that we deal with all have English speaking staff members so direct communication with them will not be an obstacle.
