Do you qualify for a mortgage?

In July 2017, 35.307 mortgages were registered for houses registered property records. According to the INE, the Spanish mortgage market continues to make progress both with the average amount of loans that rose since April 2018 and with borrowed capital that increased 17%, as indicated in the graph and table below.

As seen above, both the number of mortgages and the average amount have increased in 2018.Despite the fact that banks are granting more mortgages each day, not all people meet the requirements to obtain one. Financial institutions prefer to grant loans to candidates with stable jobs (full-time employees), and therefore, often penalize workers with temporary contracts and those that are self-employed.

The largest number of mortgages requested are those to acquire a main home of residence. Nonetheless, during the past recent months, “Fotocasa” has recorded an increase in the sale of second homes, reflecting that investment in real estate assets is gradually increasing due to the low profitability of deposits, government bonds and the instability in the European stock market.

In any case, financial institutions still prefer to grant loans to individuals who ask for loans to buy their first home, to those asking to acquire their second home. The reason is that for financial institutions, clients requesting a loan to acquire their habitual residence tend to be more reliable than customers seeking to buy a second home as a means to obtain more profitability.