When Banks “Get It Wrong”: A Mortgage Story Every Foreign Buyer Should Read

There is a moment in many property transactions where you finally feel like everything

is under control. That was exactly the case with two of my recent clients.

They are Americans with European citizenship, living and working in Spain. Their situation was, on paper, straightforward. Yet by the time I stepped in, they were already dealing with complications involving their lawyer and estate agent. My role became clear: step in, untangle the issues, and get the purchase back on track.

And we did just that.

Everything was aligned. Or so it seemed.

Then Came the Mortgage

As we approached the final stages, the clients mentioned the mortgage offer they had received was a good deal with an interest rate of 2.95% for a relatively small loan.

It immediately raised a red flag. In the current market, that rate simply didn’t reflect their profile. Something didn’t add up. So I contacted the bank directly to understand the reasoning. The response I received was, frankly, difficult to accept:

“We thought they were non-residents and that this was a second residence.”

Let’s Pause for a Moment

These clients had:

• Met with the bank in person

• Provided all required documentation

• Clearly explained their residency status

• Confirmed the property would be their primary residence

So how does a bank arrive at the wrong conclusion on such fundamental points?

This isn’t a minor administrative detail. Residency status and property use are key factors in mortgage conditions in Spain. Getting this wrong significantly impacts the interest rate offered and in turn the price of the property!

A Simple Mistake… or Something More?

We all understand that errors can happen however when those “errors” happen more often than not, and disadvantage the client; it raises an important question: Is it truly a mistake ?

This is not the first time I’ve seen this. Foreign buyers in Spain often face:

• Conditions which are not explained to them correctly or even at all

• Only Spanish Documentation with no translation available

• A lack of interest to explain anything from the bankers side

• False assumptions

What Happened Next

We asked for clarification, reviewed the documentation and the conditions with the banker. And suddenly, the mortgage interest rate lowered!

Why This Matters

This situation highlights something I say often: buying property in Spain is not just about finding the right home; It’s about having the right guidance during every step of this process. From legal advice to financing, every part of the process matters. And when something doesn’t feel right, it usually isn’t.

Foreign buyers, in particular, need someone in their corner as they are treading in unfamiliar waters dealing with a culture and language that is not theirs. Someone needs to question, challenge, and protect their interests when necessary.

Sometimes, what is presented as a simple “misunderstanding” can have a very real financial impact.

Final Thoughts

This transaction will close successfully. But it came dangerously close to costing my clients significantly more than it should have.

Not because of market conditions.

But because of an avoidable “mistake.”

Ensure you have someone who has your back every step of the way