What is a conventional mortgage?

4 April, 2023 | Alba Tebar

Interest in buying a house in Spain has been increasing in recent years, especially among those who are not regular residents in Spain. However, if you are one of them, you might have experienced that it is not easy to obtain a good mortgage. In these cases, the best you can do is to rely on a mortgage broker to help you find the best loan for you.

In Hipotecasplus we are experts in dealing with foreign clients: we accompany them throughout the process, helping them find the best mortgage on the market, according to their personal needs and interests. So, if you are also looking for someone to guide you through the spanish mortgage market, Hipotecasplus is the best solution for you. Do not think about it twice and believe in our experience: our clients endorse us!

Our team, as mortgage brokers, will act as the bridge between you and the bank entity to fins the best conventional mortgage for you. With us, you will not have to be worried for anything… we can assure you that Spain is going to be the best place to settle down with all your family once for all!

But … first things first. What you should be aware of is what are conventional mortgages and how to obtain them in Spain. It is easier than you might think: “conventional” simply means that the loan you will receive in order to oay back the property is not part of a specific government program. In a word, conventional mortgages are those ones that are granted to clients by a privat entity, such as bank entities.

What’s more, the main characteristic of that type of mortgage loan is that they are mostly cheaper than the other ones, but, at the same time, they are more difficult to get. On the other hand, conventional loan interest rates tend to be higher than those of government-backed mortgages. In that sense, interest rates on conventional mortgages can vary depending on the borrower’s credit score, down payment amount, or other factors.

Anyways, you don’t have to worry, because here it is where a good broker comes into play. Mortgage brokers will negotiate with Spanish banks until they get a good offer for you, according to your personal needs, and you will be able to enjoy a good mortgage with no effort nor headaches!

¿How to get a conventional mortgage?

To get a conventional mortgage, you must complete an official mortgage application and supply some required documents. The objective here is to assure the bank entity you have enough economic solvency and stability to be able to repay the loan.

Some of the most common requirements you might be asked for are:

  • Your credit history
  • Your current credit score
  • Your job stability
  • Proof of income

So, if you can guarantee you have all of this under control, you have higher possibilities to get your wanted mortgage. However, it is important to nota that there requirements can vary depending on your individual financial situation or even on the bank entity. That’s why it is always a good idea to compare different offers from different lenders until you find the one that offers you the best terms and interest rates, according to your needs. In that context, a broker like Hipotecasplus can be really helpful.

Furthermore, you should be aware that no property is ever totally financed by banks. They usually offer you a loan that covers 80% of the property’s value. The rest of its value goes on you. So to say, you’ll need to have between 20% and 30% of the property’s value beforehand.

Anyways, conventional mortgages tpically require a down payment of at least 5%, although some lenders may require a higher down payment, depending on factors such as credit score, debt-to-income ratio, and the borrower’s financial history.

Steps to take

To get a good conventional mortgage, takes weeks or months. But this is normal, so do not panic! On the meanwhile, here we explain you the main steps you should take to obtain it:

  • Check your credit score. By this way, you will ensure you have enough economic stability.
  • Determine how much you can afford.
  • Get in touch with a good mortgage broker
  • Find a good bank entity that offers you a good conventional mortgage
  • Apply for pre-approval
  • Gather all the required documents: we will help you with that!
  • Make an offer and get it approved

Once you’ve followed these basic steps, it will be time to finish this process and finally enjoy your new property. And remember, be patient and work closely with your lender and your mortgage broker to ensure a good result!

In conclusion, after reading this article, you might now know that finding a good and conventional mortgage is not easy. That’s the reason why we encourage you to count on Hipotecasplus as a reliable resource to stay informed and properly advised, as well as to help you during the difficult process of getting a good mortgage.

Our team will stay completely open and ready for any question you might have regarding this topic or anything else related on that field. And, of course, you can always contact with our offices with no need of commitment! We will be more than happy to help you and all your family to build a better future!