Mortgage
Buying a home in another country is not an easy task. You are not familiar with the culture, language or legal system. If in addition to this, you want to finance your purchase with a mortgage loan then it gets a bit more complicated.
With the aim of simplifying the process, Reque – Lawyers, who has a long experience in the processing of mortgages and working with several banks, will try to put on the table the best financing plans and that best suit your personal situation so that you can buy the house with which he has always dreamed. In any case it is always good to have a better idea of the whole process.
DOCUMENTS REQUIRED FOR MORTGAGE APPLICATION
Applicant’s Information
Bank application form, duly completed
Copy of passport
Copy of N.I.E.
3 most recent pay slips (for those employed by others)
Auditor’s report on annual income and the company’s annual accounts (for self-employed)
Most recent income tax return
Bank statements from the previous two months
Recent credit report (Experian)
Property Information
Copy of property deed
Copy of the private purchase-sale contract
Nota Simple (extract from the Property Register)
Proof of down-payments made to date
MORTGAGE COSTS
The costs of obtaining a mortgage loan in Spain are:
Property valuation
The Bank will designate a professional appraiser to prepare a valuation report on the property. This service’s cost, generally around €400 for an average house, is charged to the customer.
Opening Fee
The bank will charge a percentage for the granting of the loan. This payment must be made prior to the signing of the mortgage.
Home and Life Insurance
Compulsory home insurance must be taken, being the bank the beneficiary of it, so that, in the event of a catastrophe or property loss, the bank recovers the total amount borrowed. Also, sometimes the bank will also require life insurance linked to the loan, so that in the event of the death of the borrower, the debt is settled.
Notary and Registrar fees
These loans are granted through a public deed that will be registered in the Land Registry, so they will generate some expenses, also to be borne by the borrower.
Stamp – Duty
This is a tax applicable to acts that are formally established in public documents, which must be registered and which carry a financial sum such as mortgages.
Administrative agency
An administrative agency designated by the bank will be responsible for collecting the mortgage deed in the notary’s office, filing the document in the Land Registry and collecting it later, and for the settlement of the tax. This service also implies a cost to be borne by the borrower of the loan.
If you want to know the estimated costs of taking out a mortgage, we will do the calculations necessary to help you make this decision.
I CANNOT PAY THE MONTHLY INSTALMENTS, NOW WHAT?
As soon as you are aware of this problem you have to contact your lawyer, who will try to renegotiate the terms and conditions of the loan, or even propose the delivery of the property to satisfy the total debt.
In Spain loans are personal, which means that if the value of the property does not satisfy the debt contracted with the bank, it will maintain the property of the real estate and you will continue to owe money to the bank for the difference.
In case of non-resident debtors, banks may claim unpaid amounts in their country of residence and legally claim their assets, therefore, avoiding the problem does not solve anything.
When you stop repaying the loan, the debt grows rapidly due to ordinary interest, late interest and legal costs that add up to the amount owed.
On the other hand, since the repossession of the good is not of interest to the bank because of the costs generated by it, they are generally open to renegotiation to facilitate a favorable solution for both parties.
We will negotiate on your behalf and help you find the best solution.