Taking out a mortgage is a very important form of credit in today’s society. It is a financial product that you should know well in order to enjoy the benefits it offers.
In this sense, there is a universal protocol for the initial procedure that includes a series of requirements that allow for guarantees and understanding between the parties. It consists of a guarantor means for the financier and applicant to achieve structure.
Typical requirements to apply for a mortgage
Before applying for a mortgage, consideration should be given to the analysis aspects that the lender will have for the applicant. These evaluations give reliability of compliance on the part of the applicant.
- Saving of the minimum percentage of the value of the property. General rule around the financial premise that contemplates a maximum to be lent on the value of the property and leaves the remainder to the applicant.
- Stable job. A condition required by financial institutions as a guarantee that the borrowed money will be repaid.
- Good salary. A determining factor in bank evaluations for loans, a stable financial balance is considered if the applicant devotes less than 35% of his or her income to debt repayment.
- Good credit history. Evaluation element in order to check if the applicant has current loans and how the applicant’s payment relationship to these commitments is.
After these aspects, the usual documentation can be compiled in order to create the process dossier. This is a point that can be variable, but there is always a fundamental list that includes:
1. Personal identification: DNI or NIE. Personal document that proves identity for residents in Spain and is essential for administrative procedures in general.
2. Purchase and sale or lease of the real estate. Document that establishes the economic conditions through a series of specific clauses agreed between the owner and an interested party.
3. Income tax return. Annual yield process that residents must comply with before the State to determine the taxes to be paid.
4. Ownership report. Technical analysis prepared by a certified technician that determines the condition of the property and its value.
5. Energy Efficiency Certificate (EEC). Document prepared by a technician specializing in the area to determine the energy characteristics of a given property.
6. Home insurance. A policy that covers the risks of a property, which, although they may vary, usually include those associated with fire, theft, water damage and civil liability.
7. Summary of financial and work life. Characteristic documentation of finances and work showing professional stability and financial solvency to meet credit obligations
This documentation is the one that can be taken as usual when seeking access to a mortgage. It is a set that can include variants depending on the figure you have:
- Employee. A current employment contract must be attached, and proof of additional income if applicable, in addition to payroll for the last 3 months.
- Self-employed. VAT returns for the previous period, quarterly VAT payments for the current period and the latest social security receipts must be attached.
- Society. Corporate income tax for the previous year, tax returns for the current year and balance sheet of the company’s economic situation must be attached.
As you can see, it is a variable file, so it is advisable to contact the financial entity with which you intend to mortgage to confirm the documents that will be needed for this purpose.
Applying for a mortgage effectively, an easy task to tackle
You are now more than aware of what you need to do to effectively apply for a mortgage. It is a process that requires prior preparation to be a potential candidate for approval.
In the end, the key recommendation is to seek counseling if you find the process complicated. The likelihood of accessing this loan product depends largely on the first contact with the financier.