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How to negotiate with a Spanish bank to get a better mortgage

Demonstrating a good income, consulting other options or offering something in return are some strategies with which the applicant can obtain a mortgage with better conditions.

 

The procedure for obtaining a mortgage loan is quite well known: we have to go to the bank, present the required documentation, accept their offer and sign the deed before a notary public. Many applicants, however, do not know that the conditions presented by the entity at first are not always final. On many occasions, if we play our cards well, we can reach an agreement so that they apply a lower interest to us, reduce their commissions or associated products or they lend us more money than we anticipated, for example. In this article we offer several tips that will help us negotiate with the bank to get a better mortgage.

 

You have to prove solvency.

First of all, if we want to negotiate good conditions for our mortgage, we must show that we are solvent. And it is that the better our profile, the less the bank will risk when lending us the money, so the cheaper the loan will be. Therefore, we have to make sure we meet all the basic requirements: have savings to cover up to 30% of the purchase, have a good salary and a stable employment situation, have little or no debt ...

Also, our position to negotiate with the entity will be better if we offer more payment guarantees. In this sense, we will have more options to obtain more attractive conditions, if the future mortgage has two holders instead of one, if we work in a growing sector (computing or new technologies, for example), if we have been paying rent for a while without any delay ...

 

It is important to consult offers from other banks.

Second, it is advisable not to limit ourselves to just one bank. If we request financing from several entities (at least three), we can compare different offers and choose the one that seems most attractive to us. In addition, this will allow us to know if the initial proposal of a bank is competitive or not.

Another advantage of applying for a mortgage from several entities is that we can urge them to “incite” for us. If one of them makes us an attractive offer and we present it to another financial company, perhaps it will present us with a counter offer equal to or better than that of its competitor: with a lower interest, with fewer commissions or fewer associated products (insurance, pension plans ... ), with a higher amount, etc.

But it is important that we value all the conditions together, and we do not just stick with the interest rate. A mortgage with a lower interest will have cheaper installments, but if it includes other additional expenses (commissions, insurance premiums, etc.), it may be more expensive than that of another loan with a higher rate and with less extra costs.

 

We can offer something in return.

Third, we can also offer something to the bank in exchange for improving the conditions it offers us, always within our possibilities. For example, we can propose the contracting of products that interest us so that we lower our interest or take away commissions, contribute more money for the purchase in exchange for not asking us to subscribe other services ...

 

The alternative: hire a mortgage broker.

Going through this whole process (going to several entities and trying to reach an agreement with each of them) takes time. Therefore, the ideal thing is that we reserve about two or three months to get the mortgage we need. Rushing is a bad counselor, as it can lead us to accept a more expensive offer. And it is possible, however, that we do not have the time or desire to negotiate with several banks.

In these cases, there is an alternative that may be interesting: hiring the services of a mortgage broker that is responsible for achieving the best conditions based on our profile. This professional has extensive knowledge of the financial market and good banking connections, so it will be easier for him to negotiate a good mortgage.

However, brokers do charge a fee for their services, the cost of which ranges between 2% and 5% of the loan amount (paid after signing the mortgage). In general, it pays to pay that money if the conditions obtained are good, but it is convenient to do some arithmetics to value it.

 

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Al ser imposible conocer en profundidad cada caso, todos los consejos y contestaciones a la preguntas realizadas en este blog, los consejos dados son propiciado en términos generales por lo que se deberá contrastar con el asesoramiento privado de un abogado  y/o un arquitecto para estudiar en profundidad su caso.

As it is impossible to know in detail every case asked in this blog all our replies are given in good faith but we strongly suggest that you obtain private advice from a solicitor /and /or  architect who will be able to study in depth your own particular case.