Required documents for Spanish mortgage application

a) Regarding the applicant:

• Bank application form, duly completed
• Copy of passport
• Copy of N.I.E.
• 3 most recent payslips (for those employed by others)
• Working life certificate.
• Auditor’s report on annual income and the company’s annual accounts (for self-employed)
• Most recent income tax return
• Bank statements from the previous two months
• Recent credit report (Experian)

 b) Regarding the property:

• Copy of the deed
• Copy of the private purchase-sale contract already signed by the parties
• Nota Simple (extract from the Property Register)
• Proof of down-payments made to date

Once the bank has received the documentation from the applicants and the property to be mortgaged, they will issue the documents to be signed by the applicants, which are as follows:

– The Pre-contractual Information Sheet (FIPRE) that is prior to the granting of the mortgage loan and contains the generic (non-negotiated) conditions offered by that entity in a standard format which allows comparison with those of other entities.

– The European Standardised Information Sheet (FEIN) is already a binding document for the bank in which all the personalised conditions of the mortgage that the bank offers after studying the documentation provided must appear. This document must be delivered by the credit institution and signed by the applicants at least ten days before the date of signing the mortgage deed.

– The European Standardised Information Sheet (FIAE) contains information on the most sensitive clauses of the loan, such as, for example, what are the arrangement fees to be paid by the client, what index the mortgage is referenced to if it is a variable rate mortgage, how the instalments would change in case the index goes up or down, what happens in case of default, etc.

Once the applicants have signed the documentation, the bank, or its agency (“gestoría”), will upload the mortgage data to the notary signing platform and the applicants will choose the notary before whom they wish to sign the mortgage deed, that must coincide with the notary chosen to sign the purchase and sale title deed of the property whose acquisition is to be financed with the mortgage loan. At least one day before the signing of the purchase and sale deed and mortgage deed, the individual must sign a prior title deed (known as a transparency act deed) before the notary public. By means of this document the applicants of the mortgage appear before the Notary who is going to authorise it so that he can explain the conditions of the mortgage to them, verifying that they are aware and have perfectly understood the document that they are going to sign and the consequences that will be derived from such signature.

Finally, it is important to mention that according to the current legislation on mortgages, the debtor can ask the bank to convert the loan into an alternative currency: 

– The currency in which the borrower receives most of the income or has most of the assets with which the loan is to be repaid, as indicated at the time of the most recent creditworthiness assessment relating to the loan contract. 

– Or the currency of the State in which the borrower was resident at the date of conclusion of the loan contract or is resident at the time the conversion is requested.

This is the reason why many banks will only grant mortgages to applicants who receive their income or have their assets in Euro or in one of the currencies in which banks have a high volume of circulating business (Sterling Pound, US Dollar, Danish, Norwegian or Swedish krone, Swiss franc, etc.). For other currencies it is possible that banks, if they offer financing, may limit it to 50% of the purchase and/or require some kind of extra collateral guarantees.