Frequently asked questions

Determining the mortgage you can manage depends on several factors: age, income level, savings, purchase price, the number of mortgage holders, and other work and personal circumstances.

As a general rule, the mortgage you can afford should have monthly instalments that do not exceed 30-40% of your monthly net income, after discounting the instalments of other loans you are currently repaying.

The mortgage expert at SOMOS FINANCE will ask you a series of questions at the first call or meeting and can tell you exactly what property you can afford based on your unique financial situation.

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Every bank has its own requirements. They usually include a minimum monthly income ranging from €600 to €1,500, job stability with a fixed employment contract and minimum savings of between 20-30% of the price of the house.

The mortgage repayments plus the instalments on other loans you may have should not account for more than 40% of your net income.

However, the best way to know if you are eligible for a mortgage is to fill out our form for immediate mortgage advice.

It means that the bank considers that all the requirements for the mortgage appear to be met, but it does not mean that it is 100% granted. All necessary documentation must be submitted to obtain final approval.

Mortgage subrogation involves changing banks, typically to secure improved conditions. At Somos Finance one of our main services is to help you find conditions that substantially improve your current mortgage. We provide guidance throughout the process and manage the situation to reduce your monthly payments in line with your needs.

Here is an overview of the steps involved in obtaining your mortgage, along with the corresponding timeframes:

1. Pre-approval of your mortgage 1 day
2. Gather all the documentation we need for sending to banks: 4 days
3. Sending to banks and approval: 7 -10 days
4. Request for valuation nd validation: 7-10 days
5. Obtaining and signing the FEIN 2-3 days
6. Signature of the mortgage 10 days (the transparency act can be signed before these ten days)

A mortgage expert from Somos Finance can facilitate the signing of your mortgage and the purchase of your home in approximately one month.

Banks typically finance up to 70% of the property price. However, if your situation requires additional financing, Somos Finance can assist you. By studying your case, we can identify the bank that best suits your profile and negotiate a higher percentage along with better conditions.

In principle, the only insurance that a bank can require under the Mortgage Law is home insurance. This is property damage insurance, which covers damages in case of events like fires and the costs associated with rebuilding the property.

Life Insurance for the mortgage: What does it cover?

In the event of the policyholder’s death, the insurer settles the debt with the bank relieving heirs from the obligation of continuing to pay for the property,

Typically, it also covers disability situations, therefore the debt is also settled in such cases.

Some banks and insurance providers may offer additional coverages. An insurance expert at Somos Finance can assist you in analysing the life insurance options presented by the bank.

The TIN is the nominal interest rate. It represents a fixed percentage of the loan amount that the bank charges through mortgage payments as compensation for borrowing the money.

TAE is the Annual Equivalent Rate. It is used to compare mortgages from different entities. It takes into account not only the nominal interest rate but also other mortgage-related expenses, such as the opening fee and the term of the mortgage.

The differential of a mortgage is a fixed percentage added to the Euribor in a variable-rate mortgage. Variable mortgages are reviewed either annually or every 6 months, and the interest rate is adjusted based on the current Euribor plus the differential (which is always fixed).

The mortgages offered by a bank each have their own differential.

The Nota Simple, or Simple Search Information Sheet, is a crucial document to consider when buying a home and applying for a mortgage. It should be carefully examined to understand the status of the property you are interested in, including any liens, location details, ownership information, and a description of the house.

At Somos Finance, we will review it thoroughly to ensure that all details are accurate.

The FEIN, or European Standard Information Pack, is the binding offer that the bank delivers to the customer outlining the mortgage conditions. The bank is obligated to present this document before you sign the mortgage. Once signed, it becomes binding on the bank but not on the client, meaning you have final approval for your mortgage. Following the client's signature on the FEIN, a minimum legal period of 10 days must elapse before the mortgage can be signed. This period is stipulated by law to provide ample time for the client to reflect on the offer and decide whether to proceed with the loan signing before a notary.

At Somos Finance, we carefully review the FEIN with you to ensure we don't miss a single detail.

Once the FEIN is signed and before signing the mortgage (at least 24 hours before), it is an essential requirement to visit the notary for advice. They will go through the conditions of your mortgage and ensure that it is reflected in the notarial document that you have fully understood the terms of the mortgage. This process is an exercise in transparency between you and the bank.

The expenses related to the mortgage include Notary fees, registration fees, management fees, taxes, appraisal costs, and the opening fee.

All these costs are covered by the bank, except for the appraisal and the opening commission. There are some entities that voluntarily offer to assume the cost of the appraisal.

The expenses that the buyer must assume include registration fees, notary fees, management fees, property transfer tax in the case of purchasing second-hand housing, or VAT and AJD (Transfer Tax) for new homes. While there are certain tax bonuses linked to different areas and parameters, as a general rule, it is advisable to calculate approximately 10% of the purchase price to cover these expenses.

While it may appear that the offers presented by banks are fixed, the reality is that they are negotiable and can be customised.

At Somos Finance, we recommend initiating the negotiation process with two personalised offers.

To achieve a favourable outcome, the negotiator needs to have possess a deep understanding of the subject matter, as demonstrating knowledge significantly influences negotiations with the financial institution.

Certain circumstances strengthen your position in negotiation, such as your salary and saving capacity. Some banks, even with standard mortgages that may not seem competitive, offer unbeatable conditions for individuals whose income is over a certain level. Having comprehensive knowledge of the offers from all banks and understanding their respective requirements is vital.

It is essential to assess strengths and effectively justify any shortcomings before engaging with the financial institution.

Once it is clear that your profile allows room for negotiation, it's important to recognise that negotiating capacity has limits. Therefore, it is advisable to focus on two or three key aspects. Somos Finance will analyse your personal situation and provide guidance on when and how to negotiate for maximum benefit in your case.

Here are some of the elements that might be open to negotiation:

a. Interest. Above all, if the application is financially very strong (in terms of salaries, or that you could be a very good client for the entity);

b. Grace period: Negotiating that for a certain period there is the possibility of paying a lower monthly fee that only includes interest.

c. Insurance premium. You might be able to reduce the insurance premium (especially life insurance), if for example the insured amounts are reduced. The same goes for home insurance. In addition, at Somos Finance we will carry out a study to try to improve the insurance premiums offered by the bank without affecting the benefits.

d. Elimination or reduction of commissions: Opening, early repayment...

Talk to your SOMOS FINANCE manager so that together you can prepare a good negotiation strategy.

With a fixed-rate mortgage, you will always pay the same amount, even though the interest rate may be higher.

A variable mortgage starts off being more affordable but is subject to changes based on the Euribor rates.

In general, if you prefer stability, a fixed-rate mortgage might be the better choice. If you want to potentially save money, a variable-rate mortgage could be considered.

To make an informed choice, it's essential to understand each option and the implications it carries.

Somos Finance will explain these options and assist you in evaluating them. Your mortgage expert will guide you to choose the option that best suits your situation and circumstances.