Free Web Hosting Provider - Web Hosting - E-commerce - High Speed Internet - Free Web Page
Search the Web

SPANISH MORTAGES
LandBank Mortgages | SpanishMortgages | HighSpeedBridging | NON STATUS | Contact Us.

STEP BY STEP TO PURCHASE ONCE YOU HAVE FOUND YOUR IDEAL PROPERTY.

What are the steps involved in finalising your house purchase?

The following two stages often precede the final house purchase:

The pledge (Las arras)

The pledge is a sum of money which is considered a deposit or downpayment on the property. It is a small percentage of the total price, which the buyer hands over to the vendor and it normally acts as a guarantee that the sale of the property will be completed within a given period of time. If after this period has expired you decide not to buy, you will lose the sum you have laid down (guarantee subject to penalty). If, however, the vendor sells the property to a third party before the end of the period, they are obliged to pay you twice the amount that you laid down.

The Public Title Deed (Escritura de compraventa)

This is the most important document . You and the vendor sign this contract before a notary . The notary witnesses the signing of the title deed and makes the document public. Once inscribed in the local Land Registry, the buyer appears as the new legal owner.

Look carefully at all the clauses in the contract , paying special attention to those which specify who is responsible for paying the costs and taxes resulting from the purchase, and note the rights and obligations of both parties.

If before you sign, you feel that you have not received sufficient information about the pitfalls and benefits, or how the Law protects you, seek advice from a solicitor, personal property advisor or the notary.

 

 

APPROXIMATE FEES INCURRED IN MORTGAGE FINANCE.

Costs incurred before you apply for a mortgage:

  • Valuation fees: before you apply for a mortgage loan, you will need to check the real value of the property in order to decide the maximum amount you can apply for. This calculation is carried out by professional valuers registered with the Bank of Spain. The estimated cost for a mortgage loan of between 60,000 and 120,000 euros will be in the region of 250 euros, up to 500,000 euros this- approx 400 euros.
  • Fee for establishing the situation of the property in the local Land Registry : this costs approximately 25 euros.

    Cost of mortgage loan and purchase of the property:

    • Notary fees: for the granting of the mortgage loan and title deeds of the property. For a mortgage of 120,000 euros these will be 488 and 600 euros respectively.
    • Land Registry Fees: for the inscription of the mortgage loan and title deeds of the property in the local Land Registry. For a mortgage loan of 120,000 euros these will be around 105 and 220 euros respectively.
    • Taxes: on signing the public deed for the establishment of the mortgage loan agreement you will be required to pay the Stamp Duty (Impuesto sobre Actos Juri­dicos Documentados IAJD), the amount of which is determined by each autonomous government. Where no specific regulation applies, 0.5% will be levied on the value of the mortgage.

Property taxes vary according to whether the property is new or used:

  • New property: 7% VAT is applicable and IAJD is generally 0.5%.
  • Used property: The Transfer Tax (Impuesto de Transmisiones Patrimoniales) is payable at the rate determined by each autonomous region, and where there is no specified rate, this is charged at 6%.
  • Agency fees: for the administration of taxes payable to the Ministry of Finance and for inscription of the loan and purchase agreements in the local Land Registry. For a mortgage loan of 120,000 euros the cost will be approximately 249 euros in each case.
  • Property damage insurance: this is an insurance policy required by law to cover any damage which may occur to the structure of the property. The cost ranges between 54 and 99 euros per year for a mortgage loan of between 60,000 and 120,000 euros

 

Costs of setting up the loan with the mortgage provider:

In addition to the concepts described above, when you sign a mortgage loan agreement with any financial entity in Spain, you need to be aware of the following costs:

  • Opening commission: this is a percentage of the total capital provided by the mortgage loan.
  • Study commission: this is a percentage of the capital which is only applicable to loans of more than 150,253 euros

All rates are subject to change and cannot be guaranteed, details correct as at Feb 14th. 2005.

 
SPANISH MORTGAGE, PROPERTY GUARANTEE AND INSURANCE.

Mortgage loan: this is a loan where the total capital is released in a single payment at the beginning of the operation (except for new constructions), under the guarantee of the house or any other property. The capital may be destined to the purchase or building of a house, or to its renovation or extension.

You can choose from a range of interest options (variable, limited or fixed interest) and repayment periods according to the amount you can afford.

  • For greater security for you and your family when you take out a mortgage consider taking out an insurance policy:
    • Seviam Abierto: an insurance policy which covers your mortgage loan repayments in the event of death and, optionally, permanent invalidity of the mortgage holder.
    • There are many competent insurance agencies, if you require assistance we can help.

 

 
LEGAL SYSTEM