Page 9 - A guide to buying a new property in Valencia

A Guide to buying
COMMUNITYOFVALENCIA
new property in the

How can the purchase be nanced?
3.

There are number of possibilities regarding the nancing of your purchase.

The rst is equity release by remortgage or obtaining a further advance on

your main residence. This option does not involve Spain and is a matter

arranged with your lenders at home. In this case the property in Spain would

in effect be free of mortgages as the nance is secured in your home country.

The second option is to apply for a Mortgage with a Spanish Lending

institution, in which case the Spanish property would be valued and

ultimately the loan secured on the property in Spain.

The third option is to become “subrogated” or take over an existing

mortgage on the property you are buying. Here the bank again would need

to approve your application and consider your means and ability to repay.

There is no such thing as a “guaranteed mortgage” even when taking over

one already in place.

Interest rates on Spanish Mortgages tend to be competitive, although the cost

of setting up the loan, registering the charge and removing it on repayment

tends to be higher than at home. A typical arrangement fee charged by

Spanish banks would be in the region of 1% of the amount borrowed. In

addition you need to consider the Notary public fees and land registry fees

for the Mortgage deed and cancellation document on repayment.

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