At Corral & Alcaraz Law Firm we are specialized in the financial sector and are working closely with the main banks established in Spain.
We can offer you assistance with the following:
- Setting up a Spanish bank account in your name.
- Assistance in finding you the best offer for your mortgage solution.
- Moving your mortgage to a different bank to upgrade your financial conditions.
- Providing financial advice for individuals and companies.
APPLYING FOR A MORTGAGE
We can help you to find the best option available on the market in order to get the finance that you need to purchase your property. We work very closely with the main banks in Spain.
At Corral & Alcaraz Law Firm we will guide you through the whole process, providing you with professional advice during the entire procedure, from application and reviewing the conditions agreed with the bank, to completing at the Notary.
Before starting the process, you must be aware, that when you are a non-resident in Spain you will need an identification number, known as NIE number, to be able to open a bank account in Spain and sign any documents at the Notary. This is the first step:
How do we proceed when negotiating a mortgage?
We make a first approach to the bank in order to get a mortgage approved in principle. However, this will not be confirmed until a valuation on the property has taken place, as this value needs to be over the purchase price you have agreed with the vendor. You need to know that the bank will mortgage a percentage on the highest value either the one that reads on the property valuation or the purchase price.
The best deal we may get at present for Non Residents buyers is 70%, and for residents in Spain is 80%.
You will need to provision a small amount in your bank account to cover the initial costs for the valuation and the property certificate (Nota Simple) required by the bank.
Once your mortgage is approved, you have to bear in mind that a further provision of funds will be needed to hand over to the bank upfront, this is to cover all the costs and taxes involving the property purchase. This provision has to be deposited at the moment the application is signed.
We can highly advise to apply for a Property Valuation the sooner the better, because this will be a key factor to confirm, so the bank may offer the final mortgage that we need.
The Property Valuation will be arranged by the bank and it is important to know that each bank normally works closely with certain valuation companies. Should we decide to negotiate with other banks, it is very likely that our valuation will be accepted by other banks, so it will not be money wasted if we decide to move to another bank.
Therefore, the valuation costs is something to bear in mind before signing a purchase contract and paying a deposit. It is advisable to include a clause on your purchase contract to guarantee the refund of your deposit in the event of failing to obtain a mortgage.
Once the valuation has taken place, the bank will check if there are no hidden charges or encumbrances affecting the property, by ordering a Property Certificate (Nota Simple) from the Land Registry. This is a documented up to date proof of the legal ownership of the property and provides all up to date information about eventual charges affecting the property.
The bank will not supply any funds if the property is not legally updated. This is why it is so important to have all paperwork relating to your property up to date if you are selling a property, otherwise you may lose a potential purchaser just because he cannot obtain the finance that he needs to purchase your property. A very common example is when we have property alterations which have not been reported to the Land Registry, such as swimming pools, glazed in terraces, converted under builds or garages.
Once all the documentation is approved, the bank will issue a mortgage offer. This offer will become a firm offer from the moment the notary date is decided and will only be valid for a few days.
When a mortgage has been taken out on a property it is obligated to take out a home insurance. However, you are free to choose any company you prefer and not obliged to take out a home insurance with the mortgage supplier.
Besides, the bank will obligate you to take out a mortgage life insurance to cover the debt in the event of death. Some banks such as Sabadell or Caixa offer a lump sum for the total life of the mortgage which is also financed on top of the mortgage accepted. You need to bear in mind that this will slightly increase your monthly payments when repaying the mortgage.
Once the signing has satisfactorily taken place at the Notary, the bank’s solicitor will return both of the deeds a few days later and will pay the applicable local taxes, before taking the deeds to the local Property Registry to be registered in your name and will return the deeds to us with all the Registry stamps.
In the meantime, the purchaser will be provided with a so called Copia Simple of the deeds, in other words; an official copy of the property deeds.
In case you are not able to come to Spain to complete the conveyance procedure, we may act on your behalf.
You will need to grant us a Power of Attorney (PoA) to appoint us as your representative.
Mortgage and Property Purchase Costs
- Property Certificate issued by Land Registry (Nota Simple)
- Valuation costs.
- Opening Mortgage fee. (1% approx.)
- Stamp Duty Tax on total mortgage liability.
- Transfer tax on purchase price.
- Notary fees for the mortgage deeds and for the purchase deeds.
- Land Registry fees for the mortgage deeds and for the purchase deeds.
- Bank’s solicitor fees, for handling the documents and taxes on both of the deeds.
- Home insurance.
- Mortgage life insurance
By request we can provide you with an accurate estimation of the costs on the property you wish to buy and mortgage.
MOVING YOUR MORTGAGE TO A DIFFERENT BANK
We may help you to obtain a better deal and move your existing mortgage into a different bank. We will review all the terms on your existing mortgage and advice you if it is cost effective to apply for a new mortgage. We will liaise with the bank to make all the necessary arrangements and sign the title deed and new mortgage.
A Personal Loan will provide you access to money to purchase a car, boat or a motorcycle, to make home improvements and many more.
Corral&Alcaraz Law Firm assists individuals and companies who are operating in or relocating to Spain. We provide a full Financial Advice Service, including mortgaging and other financial products for you or your business.
We, at Corral & Alcaraz Law Firm, can help and advise you in finding the best offers tailored to your personal situation and can negotiate on your behalf to obtain the best deals for you.