|
The buying process
The Spanish
mortgage market is less developed than the UK market in terms of the
range of lending products available. In general, the lenders
decision to provide a mortgage is based upon:
There are
more than 30 lending institutions offering mortgages in Spain and
each has its own criteria. It is often difficult to obtain reliable
information from lenders, especially if you do not speak Spanish. At
JW Finance we have Spanish researchers who continually check the
market for new products currently available in Spain, which can save
you time and ensure that you have the product to suit your
individual circumstances.
We recommend
that you seek legal advice and we can put you in contact with a
Spanish lawyer who will act on your behalf. There are certain issues
concerning the property you wish to purchase that should first be
checked by a Spanish lawyer.
The Buying
Process
Before you
spend time looking for a property, we recommend that your first step
should be arranging your finances to ensure you know exactly how you
will fund your purchase. It is very disappointing to find your dream
property only to discover that you can not make the necessary
payments. This can be avoided by deciding first upon your budget and
confirming how much you can obtain as a mortgage. There are many
ways to do this and we can give you free and independent advice to
help you understand the various options. The services we provide
include:
-
Free
consultation and management of your mortgage, with no fee due
until the day of completion
-
Fast and
efficient response to your application
-
Clear
and simple information concerning the mortgage recommendation
-
Full
details of any fees and charges that may apply
We can
arrange for an offer in principle from one of the Spanish mortgage
lenders, which will allow you to see exactly how much you are
entitled to borrow and therefore enable you to budget accordingly.
Once you
have received an approval in principle for your mortgage we submit
full details of the property and your offer price to the bank, who
will then arrange for the valuation.
When you
agree to purchase a property, it is normal to sign a preliminary
contract (the ‘compra venta’) and pay a holding deposit.
Nota Simple
Your lawyer
will need to obtain a copy of the nota simple before valuation. This
is a basic record of the property details showing any outstanding
debts attached.
Subject to
the outcome of the valuation, the bank will come back with a formal
offer. Your lawyer will then arrange for a purchase contract (or
private contract of sale) to be signed. This is a binding contract
and is usually accompanied by a non-refundable deposit of 10% for a
resale property or 30-40% for an off plan property, payable over a
term to be agreed.
The purchase
contract will show all parties involved the terms and conditions of
the sale, a description of the property and the agreed date of
completion. It must be finalized in the presence a ‘Notary’, a
public official appointed by the Spanish government to witness the
signing of all legal documents.
On the
completion date, all parties (or their designated representatives)
visit the Notary, where the title deeds (escritura) are signed. At
this point you pay the balance of the purchase price and all fees
and taxes. This includes a tax payment of 7% of the purchase price
for new properties or 7% of the declared value for resale property.
Once this is complete, all transfer taxes and fees are paid to the
tax offices.
Next the
Notary will register the transfer of ownership at the land registry.
‘Plus valia’, a tax on any increase in the value of the land, is
levied in some areas. This registration may take a while; you can
ask for a copy of the records from your notary. It is called a copia
simple.
NIE
Non-resident
property buyers are required to obtain an NIE number. This is a
‘Numero de Identificacion de Extranjeros”, a fiscal identity number
that can be obtained through a local Spanish police station or the
Spanish Consulate in London.
Building
Insurance
Building
insurance is compulsory in Spain and can be arranged through the
lender or an independent insurance company. An insurance certificate
is required by the Notary.
Escritura
The public
title deeds of the purchase (the ‘Escritura’), will be prepared by
your solicitor and must be signed in front of the Notary.
Completion
Your
solicitor is responsible for supplying the notary with the relevant
documents and arranging with the banks the monies due to be paid for
completion. Following completion your solicitor will arrange for all
utility services to be changed into your name. The property deeds
will need to be registered and this normally takes up to 3 months.
Thereafter your full escritura will be available to be collected
normally from your bank or solicitor.
Bank
Accounts
It will be
necessary to open a current account with the selected bank as all
mortgage payments can only be taken from the lenders bank. It will
also help to have your service bills taken from this account.
If you are
interested in buying a property in Spain JW Finance offers you free
initial information on mortgages and a free initial consultation and
quote with no obligation. We will manage your mortgage from start to
finish and there is no fee charged for our services until your
mortgage is guaranteed and completed at the Notary.
We have
experienced advisors based in Spain who have the knowledge to
provide you with the best advice and find the right mortgage for
you. Our advisors compare rates and costs and maintain an extensive
database of mortgage products that we update on a daily basis. Our
advisors can deal with the banks on your behalf and explain every
step of the mortgage process to you in English, guiding you from
start to completion.
We can make
the purchase of your Spanish property as smooth and simple as
possible.
Your home
may be repossessed if you do not keep up repayments on your
mortgage. Changes in the exchange rate may increase the sterling
equivalent of your debt. |