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Mortgage expenses |
Seventh step |
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1.-Banking
Banks charge a
commission, which includes all costs resulting from the mortgage
granting: it is named the "Opening commission". It is a
percentage on the amount borrowed, which the borrower should pay
as the loan is paid into the account.
Commission on early cancellation is a percentage
on advanced payments. It should be settled just as the loan is early
paid off. Under the Spanish law, on those mortgages for which changeable
interest rate is stipulated, the commission should not be over 1%.
All credit entities should notify these percentages
to the National Spanish Bank.
Further costs do not depend on the bank:
2.-Valuation
Completed by a third party in order to establish the market value of the property.
For a main residence, banks do not usually lend over 80% of the valuation. For other properties, the amount borrowed does not usually exceed 70%.
The valuation cost is usually around 225-275 Euro. This payment is required even if the mortgage is not granted.
3.-Granting
For the purchase, the mortgage should also be granted before the Notary Public and the Deeds lodged at the Land Registry. Both Deeds are usually signed at the same time. Notary and Registry fees are also required for a mortgage.
4.-Stamp Duty
It is based not on the amount borrowed, but
on the Mortgage Liability (this figure results from adding a percentage
on interests, costs and expenses to the amount borrowed). The mortgage
liability fluctuates between 170% and 300% on the amount borrowed,
depending on each credit entity.
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