The standard types of mortgage in Spain are:
Fixed rate mortgage.-Here the rate is guaranteed to stay
fixed for a specified period.
The standard variable rate.-This is the most common
type of mortgage interest rate in Spain,which fluctuates
from time to time depending on the base rate applicable,
normally Euribor.
The following costs will be incurred when setting up
a mortgage:
• Valuation fee for carrying out a valuation survey to of the
property.
• Generally an estimate of the fee would be
300 euros.
• Bank arrangement fee,normally 1%of the money
borrowed.
• Stamp Duty at the rate of 1%of the total amount,which
includes
• outstanding sums,arrears,interest,and your
lender 's legal fees
• and costs.
• Notary fee.
• Land Registry fee.
• Building insurance policy. Requested by the lender in
order to protect
• the lender and
yourself in the event of damage to
the property.
• Life insurance policy. Requested
by the lender.
In most cases,there is a cash penalty
if you pay off the mortgage before the
expiry of the fixed period.Most banks
charge 1%of the money paid.
The mortgage deed is the public
document executed by the mortgagor
and mortgagee before the Notary
Public.The deed is produced to the
Land Registry to enable them to register
the charge against the property.
Before entering into any financial arrangements,clients
should seek advice on the sources of mortgage finance
and types of loan available in Spain,as well as any legal
and cost implications.
8. Conclusion
Buying a property in Spain can be as safe as buying a property
in your own country providing the necessary precautions are
taken. Sound legal advice will offer you not just peace of mind
in dealing with your transaction but will also guide you along
the most convenient way to purchase the property in relation
to ownership,taxation,inheritance and investment issues.
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