Spanish mortgage costs explained
There is nothing quite as daunting as having your hopes
dashed by the rocks of ignorance. The ignorance that is
referred to here is the simple fact of "not knowing" all
you need to before making a decision. A deeper
understanding of Spanish mortgage costs will help you make
the right decision. Although it may seem a little confusing
to a beginner, we have tried to highlight the key points.
Spain is a beautiful, peaceful, and stress-free lifestyle
that appeals to many. However, without knowing all there is
to know about purchasing property in Spain, it can turn
into quite a headache!
Spanish Mortgage costs include:
Property valuation: Spanish Mortgages require a property
valuation which means that a certified valuation company
will make an estimation of the value of the property before
a mortgage can be taken on the property
Land registry fee: Before a Spanish Mortgage lender will
lend money towards the purchase of the property, it must be
ascertained if there are any outstanding debts owed against
the property.
Opening Fee: Usually around 1% of the value of the
property, this is the charged set fee for establishing a
Spanish Mortgage.
Mortgage Insurance: When creating a Spanish Mortgage there
are three types of insurance required. The first deals with
the contents of the house and the house itself. The second
is life insurance and the last is mortgage insurance. The
first is self-explanatory and the last two are not
necessarily mandatory but becomes important when
negotiating the mortgage for the house.
Notary Fee: This is a charge for the clauses included in
Spanish Mortgage and is based upon how many clauses there
are
Land Registry Fee: The fee established by the Spanish
Mortgage itself and is usually the same cost as registering
the land itself, only it is included in the mortgage
Stamp Duty: Anywhere from .85% to 1.7% of the value of the
Spanish Mortgage
Deed Arrangement Fee: This fee is for the deed to be
inscribed in the local land registry to be certain that all
matters of the Spanish Mortgage are correctly done
Early Cancellation Fee: A 1% fee based on the value of the
Spanish Mortgage should the owner cancel the mortgage
Partial Cancellation Fee: Usually based on the amount of
the Spanish Mortgage that is paid off early
Subrogation Fee: This fee is similar to the opening fee,
but is one that the person who takes over a mortgage pays
in lieu of the opening fee as in a new Spanish Mortgage,
and also sets a lower rate for Notary, land taxes, and
registry
Interest Payments: This is the part of the payment made to
your Spanish Mortgage that is charged as a fee for the bank
to carry the mortgage and is higher at the beginning of a
Spanish Mortgage than at the end
Capital Repayment: This is the amount in the monthly
payment that covers the actual cost of the house less the
interest.
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Steve Magill is the right source for more information on
the Spanish mortgage market. He is a partner in
http://www.buyspain.co.uk and a Fellow in the British
Association of Entrepreneurs (FBAE). He holds international
renown for having hands-on experience in this field.
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