The next step after the rate has been agreed and secured is to sort out Spanish life insurance – usually a prerequisite for all mortgage customers. It involves completing a medical questionnaire and, if you’re lucky, ends there – but equally it can involve you undergoing some tests and then waiting for the results. Once the rate of the insurance has been settled, it can be added to the mortgage contract.
Eligibility for the insurance
Perhaps unsurprisingly, age is an important consideration when underwriters set life insurance rates in Spain. The younger you are, then generally speaking you’re likely to get cover with lower monthly payments. Older applicants? They have to pay more.
We’re often asked what kind of person is likely to be asked to undergo medical tests, and the answer is two types: people who have had medical problems in the past and those who are borrowing a large amount of money. That’s not a golden rule, but these two groups are more likely to find that the Spanish life insurance company will ask them to undertake some tests.
It is possible that you may actually be refused life insurance altogether if you have a history of serious medical problems. This isn’t necessarily the end of your Spanish property dreams, though, as it is sometimes possible to arrange a loan without life insurance. Another option may be to assign UK life cover – but this will certainly impact the number of mortgage options open to you.
Spanish bank accounts – for individuals
This is a crucial part of obtaining your Spanish mortgage. The point at which you will need to open a Spanish bank account is typically three or four weeks after you’ve initiated the Spanish mortgage application process. Before you start, you will have to obtain an NIE number – which is your unique tax number for Spain.
It is generally a condition of the loan that you open a Spanish bank account. Once it’s up and running, you’ll likely find it really useful for all of your in-country financial affairs, too.
Opening the account
The steps you need to take to open a bank account in Spain are pretty painless, especially when opening one as an individual. You begin by filling in and signing the appropriate forms, which will likely be in Spanish (surprise, surprise!), but we provide English translations of them so that you can see what you’re doing.
In addition to a completed form – scanned in so it can be sent digitally – there are also some other documents required if you want to open a bank account in Spain:
– Your new NIE number
– A copy of your passport (must be valid!)
– A copy of your marriage certificate, if applicable
– A copy of a recent utility bill – which should be less than 3 months old
– Proof of income (such as tax document, accountant’s letter or last two pay-slips)
– The reservation contract/title of the property in Spain that you hope to buy
Once we have these items from you, we can work with the bank to open an account in as little as 48 hours (though sometimes it’s slightly longer).
But (and it’s quite a big but)… while the paperwork can all be sent digitally, to actually open the account most lenders will want you to visit the bank in person – specifically, the branch that will be local to your new property purchase. So have the suitcase on standby for a trip to Spain!
This isn’t much more onerous than opening a solo account, but there is something to consider: If you wish to open a joint bank account in Spain you need to decide whether you want the account to be held as Mr and Mrs Smith or Mr or Mrs Smith. If it is the former, then both partners need to sign whenever you make a deposit or withdrawal. Plus, in the event of one partner dying, then the account will be frozen until the will has been proven. The easier option, in which either partner can sign and draw on the account, is to go for Mr or Mrs.
Banking hours in Spain
Spanish bank opening hours are surprisingly variable, and a lot has to do with where they are and the size of the branch – a tiny bank in a one-horse town will likely have less customer-friendly opening hours than one in a major city. Generally, they open at 9am and close at 5pm, Mondays to Fridays. Some banks will open on Saturday mornings as well – and may open late on certain evenings. Don’t commit the expat rookie error and expect your bank to be open at lunchtime, especially in smaller towns. It can be frustrating to turn up and find the doors locked up – but you’re likely to get it wrong only once!
Opening a bank account for a company
This is less straightforward. It is, however, somewhat easier if the bank providing the loan is also opening the new company account. We can explain the process further by phone if the company structure route interests you, but be warned that if the company bank and the mortgage bank are not the same, then a trip to Spain is a near certainty.