Nearly half of Spanish workforce have a salary of around 1,000 Euros, after tax and Social Security deductions, according to data released by the National Statistics Institute (INE) provided by the last Wage Structure Survey.
There are also a good number of expats pensioners and part time employees that also may be getting similar incomes and for whatever circumstances they may wish to buy a property here in Spain.
Well, do not despair. There are some Spanish banks that may help you now that they seem to have opened the money tap again.
You earn 600€? No problem.
Apart from the amount of earnings that one may have is of vital importance to be in a good relation with the bank, especially with regard to mortgage loans and specially if you happen to have a low salary.
The question is: can you subscribe to any of these special mortgage products? As noted in this article, the requirements demanded from banks to finance the purchase of a home is being lower to suit the current state of Spanish wages earned by workers now days, but requires a minimum income of about 600 to a 1,000 Euros .
The supply of affordable mortgages for low wages is very limited and requires some sort of previous relationship with the bank.
When applying for a mortgage, anyone earning 1.000€ or less has clear disadvantages compared to those with higher incomes. Although they have products to complete the purchase of a home, the offer is limited and there are few proposals tailored to their personal needs. Also, if you also want to have a low percent of interest in your mortgage, in all likelihood it will be hard, since it is almost always given to customers with monthly contributions of between 2,000 and 3,000 Euros.
Low mortgages given to those with high salaries but....
With low wages, the proposals of the banking market are reduced markedly and only very specific products meet the needs of its customers. In any case, they are developed for minimum income of around 600 or 1,000 Euros.
Within the mortgage market the following are available with low wages; I highlights the Ing Direct Orange Mortgage, with an Euribor + 1.49%, with no commissions, although it is compulsory to obtain a life an home insurance.
The minimum income required is 600 Euros. This is not the only option for these people, since there is another initiative from La Caixa, which includes in its offer called "Hipoteca Bonificada", designed for the same level of revenue as in the previous model. This product provides a mortgage linked to the European interest + 1.90%, which in any case may be reduced depending on the degree of relationship between the customer and the bank.
A good relationship is better.
A third option to become eligible is to obtain a mortgage from Abanca entity which comes under the colloquial name of "Mari Carmen Mortgage", given at 1.75% over Euribor, and can also be obtained with a minimum income of 600 Euros. In any case, it requires an excellent relationship with the bank and must subscribe to a home insurance and other payment protection as key conditions to benefit from this new commercial proposition.
From these levels the minimum income required for the rest mortgage proposals require to have a regular income or payroll of 1,500 Euros upwards.
They are almost nine million people in Spain, according to data published by the Tax Agency late last year with wages that, once the relevant deductions are practiced, are located in the vicinity of a thousand Euros a month. To talk about "mileuristas" (One thousand Euros earner) is a classic in Spain. This reality does not always go hand in hand with some of the major banking products. An example of this are the mortgages. Some institutions require, as a first screening, that the amount earned from their future customers to be much superior to a one thousand Euros. But there are other loans that are tailored to the "one thousand Euros" pockets. Better to get a mate.
The first qualification that they must consider is whether the future "one thousand Euros" mortgagee lives alone or has a partner. This distinction is not trivial. If you plan to carry out a solitary life keep in mind that the number of choices is greatly reduced, since most lenders offer these loans on the condition that the income of the family unit above a level of about 2,000 Euros.
We will continue next week.