Legal & Finance Assistance

MORTGAGES:
Mortgages are also readily available for qualified purchasers either from banks in Costa Calida or Costa Blanca. Firstly you must realise that the sum that the bank will finance is between approx. 70% and 80% of the purchase price in the case of residents and 60% for non-residents. Through some of our Bank contacts we can raise up to 80% for qualifying non-residents. A Letter from your Bank Manager, an Statement from your Accountant, indicating your Income position, Photocopy of the Passports of the persons in which name the property will be bought, is all is needed at this stage with the Bank. There is a tax required on all legal documents, which is calculated according to the amount of the mortgage. The expenses relating exclusively to the bank are the commission for opening the account (normally 1%) plus the interest of the loan. At the time of the writing and considering that interest rates are dropping, the rate for the first year would be between 4.0% and 5.5% whereas, for the following years, it would be the amount reached after adding the necessary differential of 1% or 2% to the reference index (EURIBOR), which is published monthly. For example, if the last published reference index was 3% either 1% (4%), 1.5 (4,5%) or 2% (5%) in accordance with the agreement.

Some financial institutions or banks use reference indexes other than the EURIBOR and also charge commission for examining the application or in the event of early repayment, whether partial or total, i.e. 1% or 2% of all the sums repaid to the bank before the due date. Naturally the figures stated here are subject to change and it is always advisable to compare rates at several different banks. However, one factor remains a constant whichever bank is approached. In order to be eligible for a mortgage you must contribute between 20% and 30% of the total price, together with the corresponding expenses. You will also be asked to provide proof of a fixed monthly income of not more than 35% of the loan in question. It is similarly advisable to retain 20% to 30% in a savings account specifically for the property purchase. This way you can take advantage of the tax benefits, which include a 15% tax deduction for a maximum of five years. Similarly once the loan has been taken out and the house purchased, you can obtain a tax deduction on both the capital invested, as well as the interest paid.

EVALUATION FEE:
In order to check that the purchase price is appropriate and fair, the bank will request a professional evaluation carried out by an independent firm. This comprises a detailed report in respect to the quality of construction and the material used, the situation, state of repair, etc. of the property and, most important of all, its market price which takes all of the above into account. The fee for the evaluation is between 130.00€ and 180.00€.

LAND REGISTER FEES:
The mortgage must be registered with the land register and, again, the fees depend upon the amount of the loan. For example, if the mortgage is 100.000, the land register fees will be 100.00€ whereas for a loan of 200.000 € the land register fees will be 200.00€

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