Getting a Mortgage in Spain Without a Job Contract

When you apply for a mortgage in Spain, just like when you apply for a mortgage in many other countries, there are a series of boxes you need to tick in order to demonstrate that you will be able to afford your mortgage repayments. One of the most common of these is that you have a contract of employment and a steady stream of income. But what if you don’t have a standard contract of employment in Spain? What if you’re self-employed, or derive funds from a passive source of income (such as a pension) either in or outside of Spain? Here’s everything you need to know about getting a mortgage in Spain without a job contract:

Securing a Mortgage as an Autonomos

In Spain, self-employed individuals are known as autonomos, and unfortunately, they are not viewed favourably by banks and mortgage lenders because their source of income is deemed to be unreliable. Even if you have a regular and high value income, you may find that the amounts your lender are prepared to lend will be considerably lower than those offered by your contracted counterparts. That doesn’t mean that you can’t secure a mortgage as a Spanish autonomos, just that you may have more hoops to jump through, and be asked to produce additional documentation. The reason? Because self-employed workers are rarely paid the same sum each month, and given the volatile Spanish job market, that means it can’t always be relied upon.

How Can I Improve My Chances of Securing a Mortgage as an Autonomos?

The following factors will work in your favour if you wish to secure a mortgage as an autonomos. They include:

• Clearly demonstrate that your monthly earnings are consistent and that you are able to maintain a high level of income. This will minimise the risk that your potential mortgage lender perceives in you.
• Clearly state your chosen business sector and, where possible, show that you have established contracts or links within that sector. The sector you work in will be taken into consideration when determining your mortgage eligibility, with some sectors deemed to be more risky than others. Sectors that are tangible (selling a physical product) tend to be considered more acceptable than virtual sectors, such as social media influencers.
• Longevity will also be key. The longer you have had your business the better in mortgage application terms, as if you can demonstrate that your autonomos status is well-established and that you have a proven track record within your sector, this will prove that your business is resilient and can withstand any unforeseen tough economic circumstances that could arise.
• Consider adjusting the terms of your mortgage contract. Self-employed workers are often asked to succumb to contracts with lower monthly payments but over a longer period of time. Your payments can’t be more than 40 percent of your average monthly earnings. So your mortgage may take longer to pay off, but this will increase your chances of securing it in the first place.
• To make yourself look as attractive as possible to a potential lender, you should be free from other debts and loans, and your bank or mortgage provider will check this too, ensuring that you are a trustworthy candidate without stretching yourself too thin.
• Regardless of your employment status, Banks will typically only finance up to 80 percent of a property, so you’ll need to make sure you have a sizeable amount of money saved up as a down payment. The bigger the deposit you can secure, the more favourably this will be perceived by the banks and lenders.

What documents Will You Need?

As already outlined above, autonomos are more likely to be asked to provide additional supporting documents for their mortgage application than their fully employed friends. There are only a few Spanish banks actively advertising their mortgages to self-employed worker, and even these mortgage providers will be selective about the applicants they choose to work with. Some supporting documents that you may find help you to state your case include:

• A copy of your tax return for at least the last year (and longer if possible) clearly demonstrating the exact amount you earn on an annual basis.
• A thorough breakdown of your business incomings and all of your outgoings and expenses
• A dossier outlining clearly how much you earn, how long you have been in business, any client contracts you maintain and the sector you work in.
• As a rule of thumb, the more paperwork you can provide the better, so if you have any other paperwork you feel may be useful to your mortgage provider, feel free to bring this along to your appointment.

Are you thinking of moving to Spain? Do you want a permanent relocation or just a Spanish holiday bolt hole of your own? Whatever you’re looking for, why not let our locally based property experts help you with your search. We’re perfectly placed to find the right dream home for you.