Often the first step to getting a loan is a valuation of the property you want to buy. Mortgage valuations in Spain are carried out by qualified professionals with the aim of ascertaining the real value of the property. But what do they involve and how much should you expect to pay? In this guide, we provide all the answers.
What is a mortgage valuation?
Let’s start with the basics and define exactly what a mortgage valuation is. It’s a report that details the real value of the property you want to get a loan for.
In Spain, mortgage valuations form the first step of the application process. The value assigned to the property is the base of the guarantee for the mortgage loan.
Did you know? Valuations are also useful when a property has more than one owner and is being sold or transferred because of divorce or inheritance, for example.
Who can carry out a mortgage valuation in Spain?
Only professionals who work for companies recognised by the Bank of Spain are permitted to carry out valuations. These professionals are usually qualified engineers or architects. They must also be officially registered as valuers.
What does a valuation involve?
The valuer usually takes measurements and photos of all inside and outside spaces at the property. The process also takes the state and age of the property into account and its location. A valuation must also include comparisons with other similar properties in the area.
Why is it important to ascertain the real value of a property?
A bank needs to know the value of a property because the loan will be based on it. Banks rarely lend more than 80% of a property’s value (less if you’re a non-resident in Spain) and a valuation will determine the amount you will get as a mortgage and how much you’ll need to find for the deposit.
For example, if a property is valued at €200,000, the bank will approve a maximum loan of €160,000, meaning you have to pay at least the remaining 20% of the price (€40,000 if the bank lends you 80%).
Did you know? We have a free guide to buying property in Spain. Download yours here.
How much does a valuation cost?
The final cost depends on the size of the property – the larger it is, the more expensive the valuation will be. Expect to pay at least €300 for a small property (e.g. a 2-bedroom apartment) and from €600 for a larger home.
How long is a valuation valid for?
A valuation by a qualified and registered valuer is valid for up to six months after it was carried out. If a longer period passes before you buy the property, you will need a new valuation.
Did you know? At Costaluz Lawyers, we are pioneers in helping clients with mortgage claims in Spain.
Who should pay for a mortgage valuation?
According to Spanish law, the client (i.e. buyer of the property) is obliged to pay for the valuation, not the bank. Under recent legislation, this is the only cost that the client must pay. All the other costs related to the loan such as notary and land registry fees for the mortgage deed must be met by the bank.
If you’d like advice about the legal aspects of mortgages in Spain or need assistance with buying property, get in touch with our expert team now.