Many customers ask about the possibilities to finance the purchase of a Spanish home in either a Danish bank or a Spanish. I will try to clarify this as best as possible. It is possible to do both, however, there is some difference between the possibilities in the two countries. Let’s start with Denmark. As Nykredit works on the Spanish market, it can be financed through them. However, there are special conditions that apply to the mortgage in Spain. The terms are as follows: Nykredit offers mortgages for housing in Spain’s urban areas along the Mediterranean coast, up to 15 km inland as well as in Mallorca. They have representation offices in Palma and Marbella and have extensive knowledge of the Spanish housing market. Nykredit International offers mortgage loans in euro, which are settled as annuities, with the option of up to 10 years of initial intrest only. The mortgage is based on the bonds traded on the Copenhagen Stock Exchange, and is known from mortgage loans in Denmark. There are the following costs associated with taking up a mortgage for your home abroad:
- Ongoing contributions
- End fee
- Assessment fee
- Registration fee for notary and registration
When buying new housing, you can borrow up to 70% of the property value. Customers who choose to place a larger proportion of their banking engagement in Nykredit can get up to 80% (If you need to make a nonperforming mortgage or to change your current mortgage, you can only borrow up to 60% of the property value) You must borrow at least 100,000 EUR as a minimum, which means that the property you buy must have a purchase price of at least approx. 145,000 EUR. As the last, but perhaps also the most important, you must be eligible for credit by Nykredit and Nykredit only accept customers with citicentship in Denmark, Norway and Sweden.
If you wish to borrow in Spanish Bank, the conditions are as follows: When buying new housing, you can borrow up to 60% of the property value, although in some banks you can negotiate terms such as property value including costs. The interest rate is usually flexible interest rate so that it is adjusted according to Euribor + the rate that the bank will earn. In addition, you have a special rule in Spain, you must have paid your loan back by the ages of 75, so if you are 60 years old when you take the mortgage, they can only give you a maturity of the loan of 15 years. Spanish banks do not have a minimum loan amount, but the cost of borrowing is the same as at Nykredit, and positive credit approval is also largely the same as for Nykredit.
There is also the possibility that you apply with a Mortgage Broker, they are English and Scandinavian speaking. They work in such a way that they send you 2 to 3 different mortgage options according to your wishes and your finances. They work with all Spanish banks as well as some European banks providing loans in Spain. Their task is to find the most attractive mortgage for you, according to your wishes and your finances. The first contact to them and the initial talks is free, if you wish to proceed, they charge a small fee from you. The good thing about using them, is that they represent you to the banks and they complete the application for you, of course, based on the financial information you submit to them.
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I hope this information will clarify many of the questions I receive from my customers.
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