Looking for a home with the intention of buying it can be a somewhat overwhelming process, especially if it’s your first time. It requires a clear understanding of many aspects, as well as some preparation, in order to successfully navigate each of these stages. This is especially true for the early stages, because the requirements for buying a home are numerous and can significantly influence your decision.
That’s what we want to talk to you about today in this article—to provide you with a comprehensive guide that will be helpful. Will you join us on this journey through the requirements for buying a home?
Personal Requirements
First of all, it’s important to realize that not everyone can consider buying a home at this stage of their life. This is an ambitious goal because, for most people, it involves a significant financial—and even personal—commitment. So, from our personal perspective, understanding the requirements for buying a home from the start can help us decide whether we can really “take the plunge.”
Having savings to cover the initial costs
It’s clear that buying a house requires money. Our savings and income will determine how far we can go in our search, so it’s important to be realistic and assess from the very beginning what the maximum price is that we can afford to pay.
So, unless we have enough savings to pay for it in cash, the calculator will likely end up being our constant companion. This applies both to calculating how much money we’ll need for the down payment (around 20% of the home’s value) and to determining the costs associated with all the paperwork involved in the purchase (which usually range from 10% to 12% of the cost).
All of this can be easily summarized: the first major requirement for buying a house is having about one-third of its total value on hand to get the whole process started.
Planning Ability
If you take out a mortgage, the down payment and closing costs are just the tip of the iceberg when it comes to the cost of your future home. You’ll have several decades ahead of you to pay off the remaining balance, but don’t be complacent—remember that taking this step means making a financial commitment both to the bank and to yourself: you’ll have to make regular mortgage payments while also covering all the monthly expenses that come with owning a home: property tax (IBI), electricity, gas, water, phone, homeowners’ association fees, etc.
So, use the calculator to plan your future as the owner of the home you intend to buy. Run the numbers and make sure your future income will be enough to live comfortably: banks typically use the debt-to-income ratio to determine whether or not to grant a mortgage. The formula is simple: (Total debt / Total income) × 100. It’s recommended that the result be below 35%, since a higher percentage could put your family’s finances at risk.
Demonstrate job stability (and, therefore, financial stability)
Building on everything we’ve discussed so far, another requirement for buying a home with a mortgage is that we prove to the bank that we have job stability. The bank will assess our creditworthiness, so it will require that we be employed at the time of application and that our income be sufficient to cover the mortgage payments going forward.
In many cases, this includes the employment contract and the most recent pay stubs, if we are employed by someone else. And if we are self-employed, instead of this documentation, we must provide the annual VAT return ( from the previous year), this year’s quarterly VAT payments , the annual income tax return ( in addition to the estimated tax payments), and receipts proving that we are current with Social Security payments.
In addition, generally speaking, they may also ask us for our employment history and last year’s tax return. We may also need to provide receipts for any other outstanding loans, if we have any, as well as a CIRBE report specifying the details of these personal loans or any other loans, guarantees, mortgages, or collateral we may have.
Time and Proactivity
Finally, from a personal standpoint, the last requirement for buying a home is having a firm commitment to do so. After all, we’re talking about one of the most important decisions of our lives, so it will deserve a significant portion of our time and attention. Be prepared from the very beginning to spend many hours researching , viewing homes, crunching the numbers, and talking to homeowners, real estate agents, banks, administrative agencies, and notaries. In short, it will require a great deal of effort. But it’s one of those efforts that ’s truly worth it.
Documentation Requirements
Be sure to put together a good folder, too, because there are quite a few papers and documents you’ll need to gather to complete the purchase of the house you want. Let’s get started!
If the home is new
Building book
These are all the documents (text and graphics) that describe the physical and technical characteristics of the home. They are also useful for detailing all legal and administrative issues that have arisen since its construction.
Final Certificate of Completion
Also known as the CFO, this is the document certifying that the construction or renovation of the home has been completed and that it is therefore legally habitable. It is signed by both the project manager and the construction supervisor, who are typically the architect and the technical architect, respectively.
First Occupancy License
This is the document issued by the competent administrative body (usually the city council) of the locality where the residence is located. It certifies that the property was built in accordance with the project’s technical specifications and that it complied with the parameters set forth in its respective building permits and licenses. It therefore gives the green light for the property to be used as a residence.
Certificate of occupancy
An administrative document confirming that the dwelling meets the basic conditions for habitation. It takes into account information such as its usable floor area, the floor area of its various rooms, its ceiling height, and the presence of minimum amenities. As with the CFO, it is issued by a technical professional; however, it must subsequently be signed and validated by a local government official.
If the home is pre-owned
Simple note
It is for informational purposes only. As such, it contains information regarding the property: its identification, the identity of the owner or owners, and the scope, nature, and limitations of their rights. It also lists any prohibitions or restrictions affecting the owners or the registered rights at the time of purchase. It can be requested in person or online at the Land Registry office in the locality where the property is located.
Building Inspection Certificate (ITE)
This is a requirement for purchasing a home if it is located in a building that is more than 40–50 years old. It is a document prepared by an architect, a quantity surveyor, or a structural engineer that confirms that the building and the property are in good condition and can continue to be used. For this reason, this technical inspection is conducted every ten years and takes into account elements such as the condition of the foundations, facades, roofs and flat roofs, and plumbing.
Building Inspection Report (IEE)
This is another technical document that certifies the current condition of the building. It takes into account the building’s state of repair, whether it complies with current regulations on universal accessibility, and its level of energy efficiency.
Therefore, it is a requirement for purchasing a home if it is located in an older building. In fact, as a general rule, this certificate must be requested when the property is over 50 years old or when 50 years have passed since its last renovation. It must also be prepared by a licensed professional, such as an architect or a technical architect.
Energy Efficiency Certificate
A document, required by law since 2013, that informs buyers or renters of a home’s energy consumption and its CO2 emissions into the atmosphere. It requires an inspection by a certified technician, who will take into account the property records and the physical structure of the building in order to conduct the inspection and calculate its energy efficiency.
Once you have obtained this certificate, you must register it with the appropriate authority in the Autonomous Community. Additionally, please note that, if applicable, it is valid for a maximum of 10 years.
Certificate of Occupancy
This is the administrative document we mentioned earlier, because it is a requirement for buying a house, whether it is new or pre-owned.
Latest receipts
Finally, it’s also essential to check the property’s payment status. This means requesting the most recent utility bills (electricity, gas, water), homeowners’ association fees, and property tax (IBI) bills to confirm that the previous owner was up to date on these payments.
Requirements for Buying a Home with a Mortgage
If you’re relying on a mortgage to buy a home, remember that you’ll also need to submit some documents to your bank. We’ve already mentioned the ones related to your financial capacity, but there are others:
- Identification document (DNI, NIE, or passport).
- A deposit agreement, if we’ve signed one.
- Deeds to our properties, if we have any.
- Lease agreement and most recent rent receipts, if we are currently tenants.
- A simple property abstract for the home we are applying to mortgage.
CULMIA helps you meet the requirements for buying a home
We recommend that you save this comprehensive guide if you’re thinking about buying a home. In fact, you can keep it alongside our “Guide to Buying a Home,” which you can download for free below. In addition to providing all this information, it offers some very helpful tips to help you successfully navigate the entire process so you can soon enjoy your new home.
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