Rodas Consulting S.L.

• How to arrive?
• Where we are?

• Home
• Selling Your Property
• Investment Opportunity
• Useful Links
• Contact Us

Legal Services

• Coveyancing to Buy
• Mortgage Arrangement
• Fiscal Representation Non Residents
• Drawing a Spanish Will
• Selling Your Property
• Investment Opportunity
• Inheritance Law/State Transfer to the Heirs
• NIE Number
• Resident Permit
• Setting Up a Company in Spain
• Land Registry Search
• Direct Debit
• Civil Law
• Legal Care

1. What is a Mortgage?

1) Introducing

The mortgage is a contract between lender and borrower to assure the borrower will repay the debt, otherwise he will lose the property pledged. On mortgaging a property, the loan is secured on the property.

• Mortgages must be formalized in a public deed of mortgage before a Public Notary
• The property must be registered at the Property Registry with the name of the owners whom the mortgage is given to.
• The mortgage shall also be registered at the Property Registry to evidence that it is a preferential charge in the property. A non-registered mortgage is an ordinary loan and therefore does not constitute a preferential charge on the property.

2) The mortgage Interest rates

• Fixed rate mortgage: the interest rate is fixed at the start of the mortgage. The periodic amount for the payment of principal and interest will not change during the term of the mortgage. Keep in mind that with this type of interest we are aware of the amounts we will be paying until the mortgage term is finished, however, we don't know whether the interest rate level will be reduced in the market or not.
• Variable interest mortgage: The interest rate on your mortgage will be adjusted up or down according to current interest rate levels. The periodic amount for your principal and interest payment will go up or down with these rate changes depending on the index set chosen (such as MIBOR).
• The initial interest will be initially lower. The banks normally use this tool to make the mortgage offer more attractive, later on this interest may convert into an excessively high interest

3) Costs and legal fees

If you intend to mortgage a second hand property, be aware that you should face costs as follows:

• Valuation of the property will be between EUROS 150-200
• Request of extract (Nota Simple) issued by the Spanish Property Registry, which shows the latest recorded details of any charges on the property.
• Bank mortgage opening fee: it shall be paid when signing the deed. This fee varies depending of the banks(between 1% and 1'5%)
• Stamp duty, (Impuesto de Actos Jurídicos Documentados) 0.5%: It must be paid when a notarial document is signed.
• Notary and Registry: These fees vary depending on the guaranteed capital of the mortgage (Between 900-1000 Euros)
• Insurance: The banks normally require the borrower to contract, at least, a fire insurance to protect its interest until the loan is repaid. The life insurance or fire insurance will cover the amount of the mortgage. The insurance fee must be paid at the moment of the deed signature (more or less 300 Euros.)

© RODAS CONSULTING SL IS A COMPANY REGISTERED IN SPAIN WITH REGISTRATION
NUMBER B-53805917 AND REGULATED BY THE LAW SOCIETY

Copyright || Disclaimer || Aviso Legal