Spanish mortgages are getting better

The current economic crisis has forced the Spanish banks to find ways to allow their clients to survive the difficult situation many of them find themselves in. The result has been the introduction of much more flexible and affordable mortgages.

Until recently it was hard to get anything other than a traditional repayment mortgage in Spain, unlike other countries who offered a much broader range of financial products.

This is particularly true for expats, who are limited to the traditional high street banks that may speak their language, or to those they are introduced to by estate agents or developers. With a little investigation however, it is actually possible to find interest-free mortgages, multi-currency mortgages and flexible mortgages amongst others.

For example, Oficina Directa offers what they call an a la carte mortgage where you only pay the interest for at least five years, then start paying off part of the capital repayment (6 percent to begin with) on an increasing scale. You can choose to pay off some of the capital if you find extra cash, or pay none if you are having a particular difficult year.

ING lets you pay off extra capital with a minimum of only EUR 1,500 as opposed to other banks who place a minimum of the equivalent of 12 months payments. This allows you to reduce the size of your mortgage without any penalties and reduce the monthly repayment or lifetime of your loan.

Multi-currency mortgages have received a lot of interest because of their low interest rates and while previously reserved for business clients, they are much more accessible to individual clients.


The benefits are that you pay for your mortgage in another currency with a lower interest rate with two of the most popular being Japanese Yen and Swiss Francs. The figures make them appealing as they could reduce your monthly mortgage payments by a third in some cases. (Note however, multi-currency mortgages are also considered very high risk mortgages because of possible exchange rate fluctuations).

Spanish bank account

You need a Spanish bank account, as the utility companies will only connect you to the services if they can set up a direct debit with a Spanish bank for payment. Most banks in Torremolinos have english speaking staff nowadays. Some banks may also produce statements in English on request.

Don´t buy debts when buying your house in Torremolinos

In Spain, debts are attached to the property, not the person, so ensure that your lawyer obtains proof that the vendor has paid all his obligations, including community fees if the property is on an urbanisation, and all utilities and taxes. Also ensure that the property is free of mortgages. It may be boring, but ask to see all the receipts.

Paying a deposit for your new home.

Don’t pay a deposit when buying your house in Torremolinos or another place on the costa del sol... unless you are certain this is the home for you. In Spain, once you hand over a deposit, you are committed to the purchase. If you withdraw later, you’ll lose your money, which is typically 10 percent of the asking price. There are plenty of properties on the market, so don’t part with any cash until you’re certain you’ve found the right apartment or house for you.

Buying a house on rural land

Be aware of the infamous Valencia Land Grab Law (LRAU) of 1994. Introduced to prevent rural landowners standing in the way of necessary expansion, the law in Valencia was badly drafted and has been used to compel householders to either surrender part of their land or contribute towards local infrastructure. Your lawyer should ensure your planned property is not affected by the LRAU, but one method of avoiding problems is to buy in an urbanised area, either in a town or village or on a purpose built urbanisation. The LRAU only comes into effect when there is a need or wish to reclassify rural or coastal land as urban for development, usually due to lack of other available land. Homes built on land originally classified as urban are unaffected.

Buying a house on the beach??!!

You might fancy a home on the beach, but be aware of the 1988 Ley de Costas (Law of the Coast). Spain wants to halt the overdevelopment of its coast, and many home owners face the prospect of having to seek permission to remain in a home they purchased in good faith years before the law came into effect. Coastal land is public land, and many builders went ahead without the necessary permissions. Even if permission was granted, local authorities may decide they want you out. You can take your case to the European Court, but you may not win, and who wants that hassle anyway? Also, with rising sea levels due to global warming, who’s to say your beach house won’t be an underwater hotel for the fishes in 50 years time?

Buying your house off plan

Unless you’ve set your heart on a shiny new build, don’t buy off plan at the moment. Several builders have gone out of business, and even the well established ones have curtailed their building until things improve. You could be waiting years for your home in the sun.
If you do buy off plan, ensure your builder is well established. NEVER BUY FROM A BUILDER WHOSE HEAD OFFICE IS A PORTAKABIN. It’s likely he hasn’t bothered to obtain all the necessary building permissions, and by the time you find out, he’ll be miles away with your hard-earned cash. Do your detective work and visit other sites operated by your chosen builder to verify the quality of build. You may get a 10 year builder’s guarantee on completion, but that’s not much use if he goes out of business, is it?

A LAWYER??? YES or NO???

Choose an independent lawyer. (Abogado)

Your agent may make recommendations, but an independent lawyer will make serving your interests his only concern.

Your lawyer should also ensure that you receive translations of all documents connected with the purchase. DON’T CONSIDER COMPLETING THE PURCHASE WITHOUT A LAWYER.

Again, ask around!! be sure his fee is reasonable and the lawyer has a good reputation and experience in real estate!

Choosing a real estate agent in Torremolinos

More and more people are buying a home in Spain, whether as a retirement home, holiday home or investment. With prices falling daily as people panic over the credit crunch and the weakness of sterling against the euro, now can be a good time to buy, but hey, - be careful out there! This is the Costa del Sol in Spain!

How to pick the right real estate agent!

Anyone can set up as a real estate agent in Spain, as there is little or no regulation. Choose a long-established agent who has a reputation to uphold. Every day, inexperienced and unscrupulous agents are closing for business. You don’t want anyone to disappear with your dreams and your cash, do you? Ensure your agent is fluent in Spanish, so there are no nasty surprises in store. Ask around about the real estate agent you want to pick out!!!!!!!!!

Where to buy in Torremolinos

If you decide to go to Torremolinos it is wise to know the town before you are going to buy something. most neighbourhoods have ther own caracter. The old town near town hall is for example way different then Playa Mar or carihuela. El Pinar is quiet with Villas, the center is busy with bars and terraces.

Torremolinos is pretty big. don´t go crazy scrolling all of the neigbourhoods.

Map

Spanish real estate jargon

spanish real estate jargon gives you some help with spanish words. Try to learn some before buying your house or appartment at the costal del Sol, Torremolinos. You will find out that even foreign real estate agents are used to use some spanish words during the process of buying. good luck studying.

Abogado – lawyer or solicitor
Apostilla – an official stamp on the document which certifies the signature
Ayuntamiento – city or town hall
Ático – penthouse
Baño – bathroom
Bodega - winecellar
Contrato privado de compraventa – contract of sale
Comprador – buyer
Calefacción – heating
Calidad – quality
Campo – in the country
Casa – house
Cocina – kitchen
Comedor – dining room
Ciudad – town
Cuarto -room
Dormitorio – bedroom
Ducha – shower
Dúplex – maisonette
Escritura – Notarised deed of sale
Escalera – stairway
Finca – farm or townhouse
Gastos – fees or expenses
Granja – farm or farmhouse
Hipoteca – mortgagee
Honorarios – fees
Huerto – orchard
ITP – transfer tax payable when buying a re-sale property
IVA – VAT
Inmobiliaria – estate agent office
Impuesto - tax
Lavadero – utility room
Lujo – luxury
Muebles – furniture
Nota simple – property registry information
Notario – notary who handles all the conveyance work for property sales
NIE – tax identification required by all foreign property owners in Spain
Primera copia – signed original of the escritura or a certified copy
Puerta – door
Piscina – swimming pool
Parcela – building plot
Piso – apartment, or floor of building
Pozo – well (of the water type)
Precio – price
Pueblo – village
Propiedad – property
Rústica – rural or agricultural
Reformada – modernised
Río – river
Salón – lounge
Se vende – for sale
Trastero – storage room
Urbanización – community development
Vendedor – seller
Ventana – window

More legal information

The next article gives you more legal information you need, before buying a second hand house or a new development in Torremolinos or Spain in general. This is crucial information before buying real estate in Spain.Below are some of the things you need to consider when buying a property in Spain:

Prior to viewing houses in Torremolinos.
Prior to arriving in Spain, you should make sure that you have at your disposal sufficient funds to cover the reservation sum. The absolute minimum required is normally € 3.000 to € 6.000 but may be greater for higher priced properties. The reservation sum may be paid with a credit card or cash. A cheque if drawn on a foreign bank may take up to ten days to clear by a Spanish bank.
If you do not have the means to lodge a reservation sum immediately you may risk losing the property to another party who has the reservation sum ready to lay down. There are virtually no exchange controls in Spain which means that, whether resident or not, you are free to obtain a loan or mortgage against your property in any currency and from any bank in the world. Spanish banks are quite willing to lend to non-resident purchasers of Real Estate. You will need:

A photocopy of your income tax returns
Three months salary slips
A bank reference
A breakdown of assets and liabilities
Last three months bank statements
If self employed, statements of accounts
Negotiating the purchase

Once a suitable property has been chosen the purchase terms and price will need to be negotiated with the seller. You may wish to make your offer subject to mortgage or Lawyer approval, or vary final completion dates, or the method of payment. The salesman who was good at finding the property may not be as good at negotiating the terms of sale with the owner. Ask to speak with the senior sales person or sales manager in the company and discuss with him the formation of a team to negotiate and carry through the terms of your purchase. The sales person may at this stage feel it of benefit to bring into the team a recommended lawyer to assist in the negotiation making sure that any offer meets his legal criteria.

Choosing a Lawyer

There are many excellent local Lawyers in Spain who are fluent in your language. A Lawyer will provide the legal guarantees for the purchase of the property ensuring that Spanish legal requirements are met and that the property is bought free of encumbrances, charges, liens or debt and up to date in all its payments of local contributions and community charges. The lawyer may also assist the sales team in difficult and complex negotiations with the owner. Using a Lawyer from your home country will substantially increase your legal costs and almost certainly delay the sales process.

Formalizing the offer

Once there is a verbal accord between parties the next step will be to formalize the offer terms of purchase in writing. Funds should be lodged in a local bank account or with your Lawyer in order to show the seller that there is a real intention to purchase. It is normal practice in Spain to include with the offer a sum of money to reserve the property until exchange of private contracts.

Exchange of private contracts

Upon acceptance of the offer by the owner the next step in the sales process is to exchange private contracts of sale or to sign an option to purchase. This may take place within two weeks following formal acceptance of the offer or sooner. Your Lawyer will have completed his searches and investigations of the property and will have arranged with the owner the procedure for the cancellation of any outstanding debts. The private contract of sale or option will reflect all the agreed terms of the offer and sale and set out the date for final completion at the Notary. It is customary practice at this stage to pay ten percent of the purchase price which normally is non-refundable should the purchaser not complete.

Final completion at the notary

A sale is formally completed in Spain when the public title deeds of purchase are signed before a notary, the final payment made, and possession given to the buyer.

Registration

Once signed, the notary will fax a note of the title deed to the local land registry. Your Lawyer will also pay on your behalf all the relevant transfer taxes associated with the purchase and will handle the formalities of registration of your title deeds. Final registration of the deed may take up to two months. Similarly, your Lawyer will arrange for the transfer of accounts with the local suppliers of utility services such as water and electricity and organize payments through a local bank.

Costs involved in purchasing a property

There are in principal three fees and two taxes to pay when purchasing property in Spain. As a rule of thumb, you should budget the combined total of these amounts will be around 10% of the purchase price.

The fees are as follows:
Legal fees: Minimum of €600 or 1% of the purchase value whichever is the greater plus value-added tax (I.V.A) currently charged at 16%.
Notary fees: the scale is fixed by law and may range from €300 for lower price properties to €841,40 for higher priced properties.
Property Registry: as a rule of thumb is 60% of what the notary charges.
The taxes

Transfer tax (ITP) at 6% or, when buying from a promoter, developer or habitual trades, IVA at 7% or 16% plus Stamp Duty at 1%. The IVA rate of 16% is applicable when purchasing parcels of land, commercial premises, or garage spaces.

Plus Valia:Normally payable by the vendor but it may be stipulated that the buyers pays. This may range from a few thousands pesetas to as much as several million pesetas on larger properties with a lot of land. Who pays this will be discussed in the negotiations and in consultation with your Lawyer.

Read here about you social security number

Where to start. About your N.I.E.

The first step when you decided to buy a house or move to Spain for a period longer than 3 months would be arranging a NIE identification number.

•An NIE code is essential when buying property, opening a bank account, starting a business, use short-term employment agencies or receive social security benefits

•The NIE number is both a Social Security number, and a tax identification number

•Applications for an NIE can be made at a police station with a foreigners department which can be found in the most towns of 100.000 or more inhabitants. Foreigner department in Torremolinos is at nacional police station at calle skal. Right in the center.

To obtain the NIE go the police department Oficina de Extranjeros in calle skal you are intending to be registered and ask for necessary papers. Like most offices it is overcrowded and only attend visitors in the morning hours until 1 p.m. So first collect an application form for NIE and fill it in at home.

•You will need the number repeatedly filling in various paper forms as well as to identify yourself through internet sites like online banking.

Make copies of all the documents you will need to supply with the form and return other day early in the morning so you will be ontime to get a number and file the form. The office will then indicate when you can collect your NIE. Normally it will take 2 weeks to 1 month.

Residence card

As of March 2007 EU citizens do no longer need a residency card Extranjería). European Union citizens are issued with a certificate stating their name, address in Spain and NIE. You can always apply for such a certificte at a later stage.

Pensioners who are retiring to Spain still require a residence card. Consult with a local lawyer on this matter.

Citizens of non-EU countries must have a residency permit. It should be applied for within 30 days of arriving in the country. The application should be addressed to the Foreigners' Office (Oficina de Extranjeros) or, depending on where the nearest office is, the local police station.

Non-EU residents are allowed to stay in Spain for a year on an initial permit (residencia), which can be renewed, and lasts up to 5 years.

Before departure for Spain a Visado de Residencia must be requested from the Spanish Embassy of the home country.

Social Security Card

If it is the first time you have worked in Spain you must obtain a personal social security membership number. You can arrange this yourself or your company can do it on your behalf.

Consequently, you will obtain the social security card (tarjeta de seguridad social), which must be presented at the corresponding health centre to be assigned to a doctor and obtain a health certificate.

Registration at town hall

If you wish to prove that you live in Spain you may register with the local Ayuntamiento (local council). In order to do so you only need to present the rental contract for your accommodation or an electricity or water bill, etc. to prove that you actually live there. In many cases being registered means paying less communal fees or getting reduced price membership to town sport facilities etc. It will also enable you to vote in local elections if you are an EU citizen.

Our advice!! Take a trustable and bilangual specialist let him or her inform you about your specific situation it cost you a bit, butt will help you a lot.

Buying a house in the Financial crisis. Smart or Stupid??

Currently we are in one of the biggest financial crisis ever. Spain is doing even worse then most EU- members. Is it wise to buy a house now?

First of all we can tell you it is not easy to get a mortgage in this time. Specially spanish banks are very difficult. Most banks will say no on forehand. One of the most flexibel banks is IBER CAJA. They still give 80% of taxation value.

But even when the bank gives you the loan, what will happen with the real estate market? does it go up again soon or will it go down further?

Spain and the Costa del Sol are two different topics. The two housing markets do funcion in different curves. Expectation is that Spain as a whole will suffer long time and so housing prizes will go down further the next few years. On the Costa del Sol is more or less the same expectation, but with one difference. Northern europeans do influence the property market big time. So an economic recovery in the north of Europe, will have a positive effect on the Costa del Sol and Torremolinos. Is the economy in northern Europe not recovering on the short term, The south of Spain could be worse then the rest of the country.

Buy now or later?
There are still lots of houses way too expensive, but if you take your time and have a good look around in southern Torremolinos.there are lots interesting offers on the market. We would say yes you can buy something, but be careful!!! If it is a real estate investment for a long time. Good! If your short time future is less secure. DON´t. Wait a few more years to buy your house in Torremolinos, because it is almost sure, that prices won´t go up big time.

More economic information about Spain and information about real estate development have a look on Wikipedia. Good article!!

Why buy a house in Torremolinos??

Why should you buy a second home or even maybe your first home in Torremolinos? On the Costa del Sol are more posibillities. For example Benalmadena, Fuengirola or Marbella....

The towns mentioned above are all big tourists resorts in Spain, Costa del Sol. Same climate, beaches and shops for everybody.

What makes Torremolinos different:

1) Closest resort to an airport, it´s only ten minutes by train.
2) Torremolinos is a lively town with 60.000 inhabitants. That means all year round activity. Some places at the Costa del Sol can be dead boring in winter.
3) Torremolinos is way more spanish then for example Benalmadena or Fuengirola. More then 50% of all tourists are spanish.
4) Torremolinos and Malaga are practically one city. It is more or less 20 minutes by train to the lively and historic center. Marbella, Malaga is almost an hour.
5) Choosing your property in Torremolinos is easy, because it is a very divers town. It has some high rise with beautiful views, a lifely city center, or quiet outskirts with villas. Do you prefer autentic old town, touristic (foreigners) Carihuela or a small bungalow on the cliffs above the beach. Lots of choice in real estate!!!
6) Torremolinos is having the biggest and longest beaches on the coast with palm bushes. You can always find a quiet spot.
7)After all, it is a matter of taste ofcourse.

Have a look over here at some real estate agents or inmobiliaria (spanish for real estate agents). Decide for yourself ofcourse which town suits you!!

Real Estate Torremolinos

This blog is for every body who is interested in buying a house in Torremolinos, Costa del Sol, Spain.

We will give you information about the local market, tips, ideas and other useful suggestions.

Ideas from reader´s point of view are very welcome of course.

We are not a real estate agent or an inmobilliaria in Torremolinos and we dont sell anything.

More to follow soon