Leverage Your Equity to Buy Spanish Property..

Property:Real-Estate

So you want to buy property in Spain. The first step is to set up your financing so that you can move forward with the fun part – searching for the perfect piece of property. When you’re putting together your financing, there are ways for you to leverage the equity in your existing home to help fund the purchase of Spanish property.

Spanish Mortgages Explained

The rules related to Spanish mortgages are a bit different from those in some other parts of the EU. It is against the law for a Spanish bank to underwrite more than 80% of the cost of a property if the property is being sold to a foreigner. This means that for you to buy that perfect getaway in Spain you will need to put at least 20% down in order to obtain a mortgage from a Spanish bank.

Using Your Equity

One way to deal with this situation is to tap into the equity in your existing home. In many cases, as home values have risen dramatically you have in effect gained equity against the new home value. Depending on the amount of equity you can access, it may be possible to use this source of money to obtain the 20% down payment you need for the Spanish property.

It’s important to be cautious if you choose to pursue this option. Remember, if you borrow against the equity in your home to help buy property in Spain you’re going to end up with a higher mortgage payment on your existing home as well as a mortgage payment on the Spanish property. Take an honest look at your financial resources. Can you really afford the increased payments and still have enough money to cover living expenses, maintenance expenses on two properties, and saving for retirement or unexpected expenses?

Where To Look For Help

The popularity of buying property in Spain has literally exploded over the last few years, and that means there are more resources than ever to help you finance your Spanish property. There are numerous agencies throughout Europe that specialize in comprehensive assistance for people seeking to buy property in Spain. These companies can help with financing, property evaluation, closing processes, and even arrangements for ongoing maintenance of your property if you don’t choose to live in it right away.

The legal system in Spain is somewhat different, especially when it comes to property law. Make sure that you retain expert assistance to guide you through the complexities of the buying process. This is especially important if you have used the equity in your home to help finance the new property. If you make a mistake in the purchase process it can cost you a great deal of money, putting strain on your financial resources and risking your home.

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