Borrowing capacity<\/li>\n<\/ul>\nRequirements for a Self-Employed Mortgage in M\u00e1laga<\/h2>\n
The requirements for getting a mortgage when you're self-employed are the same as for any other profile. The bank requires financial solvency and that the self-employed person can repay the amount borrowed plus interest.<\/p>\n
To do this, the self-employed person must show, through the documents the bank requests, that their ability to pay is good. They'll need to provide their last four quarterly VAT and income tax returns, plus their annual tax return and everything else the bank needs.<\/p>\n
They must also show they have the savings needed to cover what the bank doesn't finance. The higher the loan-to-value the self-employed person requests, the more expensive the mortgage and the stricter the requirements.<\/p>\n
Anyone who wants a mortgage, whether self-employed or employed, must meet the bank's minimum requirements.<\/p>\n
If you're self-employed, the bank will also require you to\u00a0meet some additional conditions<\/strong>\u00a0to make sure you're solvent. These are the requirements you absolutely must meet:<\/p>\n\n- Stable income over time<\/strong>. The bank will be more willing to approve your application if it sees your self-employed turnover has been steady over a couple of years.<\/li>\n
- Your business must be at least two years old<\/strong>. Having worked for that long will show your business is viable.<\/li>\n
- The fewer debts you have, the better<\/strong>. Another point the bank will scrutinise is your level of debt. To be granted a mortgage, its repayment plus those on your other current loans mustn't exceed 35% of your net monthly income.<\/li>\n
- Your credit history must be free of defaults<\/strong>. No bank lends to self-employed people with unpaid debts to their suppliers, the tax authorities, Social Security or other banks.<\/li>\n
- You need 30% of the house price saved<\/strong>. As a rule, banks don't finance more than 80% of the purchase. So you'll need money to pay the remaining 20% plus the extra 10% for the costs of the purchase (taxes, notary, registry and gestor\u00eda).<\/li>\n<\/ul>\n
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What documents does a Self-Employed Person need to apply for a Mortgage?<\/h2>\n
Naturally, banks won't just take your word for it. You need to\u00a0provide a number of documents<\/strong>\u00a0to show you meet the requirements set out in the previous section. Most lenders will ask for the following:<\/p>\n\n- A dossier about your business activity<\/strong>. The bank will find it useful to have a summary of how your business works. You can explain what you do, your relationship with your clients, your business's history and current situation, and your plans for the future. In other words, a kind of CV for your business and for you as its owner.<\/li>\n
- Your latest income tax return<\/strong>. This lets the lender review your tax information to see how much money you earn. They may ask for previous years' returns too, so it's a good idea to have them ready just in case.<\/li>\n
- The last year's quarterly VAT and income tax returns<\/strong>. The bank needs them to see your business's accounts.<\/li>\n
- Your employment history report<\/strong>. A Social Security document showing your professional career and how long your business has been running.<\/li>\n
- Statements for your accounts\u00a0<\/strong>(personal and business)\u00a0for the last six months<\/strong>. These are usually requested to check how much money you earn and how much you pay regularly to suppliers or other financial institutions.<\/li>\n<\/ul>\n
The bank will also check the Bank of Spain's Risk Information Centre (CIRBE) and default registers such as ASNEF or RAI to make sure you have no unpaid debts.<\/p>\n
Apply for a Self-Employed Mortgage<\/h2>\n
If you meet all the requirements and have your documents ready, you're ready to apply for financing. As you'll see, the steps are the same whether you're self-employed or employed:<\/p>\n
\n- Contact a bank and explain your situation<\/strong>. The bank's manager will carry out a preliminary analysis to see whether you can get a mortgage. If they think the transaction is viable, they'll explain the terms the bank usually offers self-employed people like you. You can use this moment to negotiate improvements: a lower interest rate, fewer fees, etc.<\/li>\n
- Provide the documents requested and have the home you want to buy valued\u00a0<\/strong>by a valuer approved by the Bank of Spain. Your bank manager will send the documents and valuation report to the bank's underwriting department, which will study your profile and decide whether to grant the mortgage (and on what terms).<\/li>\n
- Study the personalised offer the bank makes you<\/strong>. You'll need to read the FEIN carefully: a document setting out all the terms of your future mortgage.<\/li>\n
- Accept the offer\u00a0<\/strong>if you're happy with the terms, and agree a date with the bank to complete the mortgage before the notary of your choice.<\/li>\n
- Go to the notary's office<\/strong>. You'll need to go twice: once to receive free advice on your future loan and again to sign the deed.<\/li>\n<\/ol>\n
Terms of a Self-Employed Mortgage<\/h2>\n
It's no exaggeration to say the self-employed are one of the worst-treated groups of workers in Spain: banks usually offer you worse financing terms, the tax authorities keep a tight grip on your accounts, many clients pay you at 30 or 60 days\u2026 Because we know all the difficulties you face working for yourself, we want to help you get your mortgage.<\/p>\n
Here are three tips that will increase your chances of getting a good self-employed mortgage:<\/p>\n
\n- If you can, apply for the mortgage with an employed person<\/strong>. Your partner, for example. That way you'll have a much better chance of the bank approving the application and offering you good terms.<\/li>\n
- Sell your business well<\/strong>\u00a0so the bank gets a good first impression. Have all the documents ready that show your business is viable and, if you have important clients, don't be shy about mentioning them.<\/li>\n
- If your profile is good, make the most of it<\/strong>. Apply for financing at as many banks as you can and make them compete for you. That way you'll have a better chance of getting better terms than those initially offered.<\/li>\n
- Consider entrusting your mortgage application to our finance department. WE ARRANGE YOUR MORTGAGE FREE IF YOU BUY WITH US<\/strong><\/li>\n<\/ul>\n
Self-employed mortgages: what are they and how do they work?<\/h2>\n
Self-employed mortgages in M\u00e1laga: what are they? How do they work? Advantages and disadvantages. Which banks offer self-employed mortgages? Which is the best? How do you apply for a self-employed mortgage?<\/p>\n
There are more than 3.3 million self-employed people in Spain, meaning that instead of working for someone else they have their own company or business. Although they find it harder to get financing to buy a house, it's not impossible. We go over the key points of self-employed mortgages, the requirements banks usually set and the documents you need to provide.<\/p>\n
When we apply for a mortgage, one of the first things the bank will ask for is an employment contract and the corresponding payslip. However, for the self-employed (people who work for themselves),\u00a0there's no employment contract or fixed payslip<\/strong>, as income depends on the work done each month.<\/p>\nIn other words, self-employed people won't have a fixed salary every month, which banks may initially see as a greater risk when granting a mortgage.<\/p>\n
However, this doesn't mean the self-employed can't get a mortgage. They simply need to\u00a0show the bank they have the financial solvency needed<\/strong>\u00a0to assure it they can repay the loan without problems.<\/p>\nThe most a client can apply for, always depending on their circumstances, is 100% of the purchase price, with the client paying the purchase costs.<\/p>\n
If the client can't cover the costs, they can apply for a personal loan.<\/p>\n
Advantages and Disadvantages of a Self-Employed Mortgage<\/h2>\n
Like all mortgages, the self-employed mortgage has its advantages and disadvantages compared with other mortgages.<\/p>\n
Advantages:<\/h3>\n\n- If you have a good profile, you can get excellent terms.<\/b><\/li>\n<\/ol>\n
Disadvantages:<\/h3>\n\n- Greater difficulty:\u00a0<\/b>banks apply more filters and hurdles<\/li>\n
- Tie-ins:\u00a0<\/strong>the bank usually requires the client to take out more tie-ins than with other mortgages.<\/li>\n<\/ol>\n
Self-Employed Mortgages for More than 80%<\/h2>\n
If you're self-employed and need a mortgage for more than 80% to buy your home in M\u00e1laga, call us and we'll take care of everything.<\/p>\n
Request your free financial advice to find out the terms and requirements for getting one.<\/p>\n
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