Getting a mortgage in Spain is a challenge for many, especially when it is a second home. Banks are putting more obstacles and tightening the conditions for those who want to buy a holiday home.
The situation of buying a normal home in Spain is already complicated, with prices rising and demand continuing to grow. According to recent data, the price per square meter has risen by 8% over the past year, reaching an average of 2,153 euros.
This increase has made it more expensive to buy a first home. However, for those looking for a second home, the situation is even more difficult.
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Stricter requirements for second homes
When it comes to financing a second home, banks impose stricter criteria than they would for a first home. These include requiring more income and applying higher interest rates.
Banks see second homes as a greater risk, especially since buyers are more likely to default on a loan on a home that is not their primary residence.
One major factor buyers should consider is that they will need to have more savings when purchasing a second home, as banks typically offer less financing for these transactions.
While banks finance up to 80% of the purchase price of a typical home, that percentage drops for a second home. It ranges from 60% to 70%. This means buyers will need more equity to cover entry costs and the additional costs of buying.
Another condition that makes it more difficult to get a second home is the short mortgage term. Banks generally offer terms of up to 30 or even 40 years for regular mortgages. But for a second residence, the maximum term is usually 25 years.
This shorter term means that the monthly fees will be higher. This forces buyers to have a higher income to be able to afford the subscriptions.
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Aside from income, banks also require other additional guarantees, such as having a guarantor or even putting up another property as collateral. In addition, it is essential to have a stable job and an impeccable credit history, he says. informationBanks check in detail that the buyer has no previous default and does not appear on the defaulters lists.
Entities do not make it easy to grant mortgages.
Another factor to consider is that second home mortgages tend to have a higher interest rate. Banks see these transactions as riskier, especially if the buyer is still paying off the mortgage on the first home.
This means that not all financial institutions are willing to grant mortgages for second homes. And those that do offer less favorable conditions.
Buying a second home in Spain is clearly not an easy task. Banks require more savings, more income and charge higher interest rates due to the higher risk they perceive. Potential buyers should be prepared to meet stricter requirements and have sound financial planning.
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