PURCHASE COSTS WITH LOAN

If you are planning to buy a house in Spain using a mortgage loan, it is important to fully understand the conditions you need to comply with in order to obtain a loan.

There are two important factors to consider while calculating the costs of mortgage- the purchase costs and the mortgage fees.
There are two kinds of mortgage, those with fixed interest rate and others- with variable interest.
The fixed interest rate mortgage, just like the name implies, guarantees unchangeable monthly fee until the end of repayment. In practice, this kind of loan assures safety and predictability during the whole repayment process.
Obtaining a variable interest rate loan, you need to remember about the clause included in the contract, where the bank reserves a right to change the interest rate accordingly to Euribor.
Euribor is the main indicator for mortgage with a variable interest rate.
The bank determines the creditworthiness and grants a loan. They also advise and suggest the best solution for each customer. It is worth to remember that while signing a contract, we have the full right to negotiate its conditions.

Underneath we present all the information concerning the costs of buying a property with a support of a mortgage. As an example, we used a real estate price of 150 000. These costs are not fixed and vary according to prices and locations of properties.

• Real estate tax (IVA or ITP)- 10% (15000 euros) in the Alicante province and 8% (12000 euros) in the province of Murcia
• Escritura publica- the cost of the notarial deed, the fee can differ depending on the length of the document, between 500 and 800 euros
• Registro de propiedad- entry in the land and mortgage register, around 300 euros
• Preparing the mortgage documents (done by the bank)- around 400 euros
• Tasacion- property´s valuation, around 250 euros
• Life insurance- 300 euros
• Property insurance- 200 euros
• Bank interest on issuing a mortgage- between 1% and 2% of the loan, depending on a bank
• Solicitor´s fee- each real estate purchase requires the presence of an accountant or a lawyer who determines the legal status of the property. They also complete all the formalities concerning changing the owner´s name on all water, electricity and gas contracts. (If there is a necessity of installing new water meters, the costs grow accordingly.)

Underneath we present the mortgage costs covered by bank in Spain:

• The costs of a notary, usually 500 - 800 €, it all depends on how many pages the file will contain, the number of copies issued etc.
• The costs of rewriting a notarial deed at the city hall, i.e. registration of the property for a new owner, € 300
• Bank accounting costs when granting the loan, around 400 euro