Now that the purchase contract is taken care of – your money is no longer at risk should the banks let you down at the last moment.
Now what? Well now you need to find that mortgage. There are lots of banks in Spain and Tenerife offering mortgages to non-residents so how do you know which one to choose? The difference between one type of mortgage and another can literally double the amount of money it costs you to purchase your property. Amazing but true.
On this website about Tenerife Mortgages there is a great example of how you can end up paying far more than you ever need to with just a few wrong decisions.
Bear in mind that there are the legal fees and taxes to be paid in addition to the sum not covered by the mortgage. So on a purchase of 200,000 Euros for example, the additional costs add up to 20,000 Euros.
If you are offered a 70% mortgage (140,000 Euros) you need to find the difference (60,000 Euros) plus the costs (20,000 Euros) which totals 80,000 Euros cash.
A 70% mortgage is quite typical in Spain although more is sometimes achievable. generally speaking though, the more you want to borrow, the more interest the banks will charge you so if you don´t need that extra 10% – don´t take it.
A good independent Spanish Mortgage advisor is worth their weight in gold and will look after your best interests, we always recommend an independent broker over approaching the banks yourself, worse still do not allow your estate agent to arrange your mortgage. None of them broker the mortgage market in Tenerife and it is a huge conflict of interest letting them control this aspect of the sale.
