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Purchase a property with a mortgage

Publicado: 13 de febrero de 2019, 11:06


There are many issues to consider when purchasing a property

1.-Preliminary contract

This is a contract regulated by civil Spanish Code whereby both parties sign a contract to commit to the buying and selling the property. If the buyer decides not to buy the property, he loses the deposit, by contrast, if the vendor decides not to sell, he must return  double the amount of the deposit as indemnification.

2.- Resident´s association

The buyer must make sure that all bills have been paid by the seller and the property is free of debt. We recommend the buyer gets a copy of the last minute meeting resident´s association in order to know the real situation about the property.

It is very important to know the rules of the residents association before the purchase.

3.- “Nota simple” from Land Register

It is important to get a “Property certification Certificate Nota simple” of the property to know if it has outstanding burdens, easements and or joint ownership.

4.- Hidden faults

The Spanish civil Law grants six months since the execution of the purchase so that the buyer can claim any hidden fault of the property. The seller is obliged to repair the fault, and even the buyer can terminate the contract.


For the purchase of the property to be legally binding, the signing of the deed must be done at the notary and the deed recorded at the Land Register Office. These costs are usually paid by the purchaser unless agreed otherwise.

The buyer must pay a tax so-called “Impuesto de transmisiones patrimoniales” . This is different in every autonomous region here in Spain. In Galicia the overall is 10%, however this can less according the case. (if it is the first purchase,  you will pay the 7%)



Should we need funding in order to carry out the purchase, we should take into account the following items:

1.- Interest rate and payment period

The most term, most interest and most expensive will be the loan.

The interest rate of reference is EURIBOR. At present it is negative, so banks are currently offering  a loan with fixed rate. It is important the negotiation with the banks in order to get the best rate.

Banks will make a negotiation in order to get you bound by their products as long as possible; they may offer you a lower interest rate if you contract other financial products. But it´s important to know, that this may not be the best option for you as may be a higher cost for you.  .

2) bank products

We recommend the following bank products that you may contract in exchange for better interest rate:

Life insurance (recommendable if you have a family in case of dead or permanent disability)

Home insurance and pay with debit card[SG1] .

Salary set down

Be careful with other products such as credit card or pension plans.

3) Abusive clauses or terms

Pay attention with the unfair terms which are object of litigation now. These are:

“floor clause” or limitation of interest rate, cost term, delay punish term and early termination  of the loan term.

Spanish law forces the bank to make available for you the mortgage contract at the notary three days prior to the final signature meeting as the the buyer can read and ask to the notary any doubt and negotiate if possible.

4) costs

Currently, after the last sentence of the High Court about this matter, Bank must pay half of Public Notary cost, Real State Registry cost and the management of them. and the processing agency bill.

Buyer must pay the Public Document taxes. ACTOS JURIDICOS DOCUMENTADOS. This tax is different in every part of Spain. Here in Galicia you must pay 1,5 %.

There may be other costs that you may require the bank to have them paid as for example the property valuation; however, be careful because the High Court haven´t sentenced about this regard so it is important to have it consulated at the moment in which the mortgage is going to take place.

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