In INMOBILIARIA PALMA DE MALLORCA BONAFINCA we carry out free financial studies, for this we have specialized financial advisers to design financial proposals tailored to the client. In addition, we have agreements signed with Spanish and foreign banks to obtain the best mortgage conditions on the market.

Putting your finances in order and having all the necessary financial information will help you evaluate your debt capacity and accumulated savings, and present and future effective income and expenses.

It is one of the most competitive, transparent and safe activities:

• Competitive , because there are many and varied offers.
• Transparent , because it is fully regulated by law.
• Safe , because a Notary Public intervenes who gives public faith of the operation, with the subsequent registration in the Property Registry.

Below we explain what a mortgage is, some types of mortgage loans, documentation necessary to apply for a loan and the expenses and taxes in the sale of a home.

The mortgage is a real right of guarantee and realization of value, which is constituted by means of a public deed before a notary public. In addition, the laws require that the mortgage deed be registered in the Property Registry. Essential requirement for the mortgage to be born and reach effectiveness between the parties and against third parties, its function will exclusively be to serve as a guarantee, allowing the mortgagee (Bank, Savings Bank, natural or legal person) to submit the mortgaged asset for sale forced, in case the debt is not paid within the agreed term.

The property is not owned by the Bank due to the fact that it has granted the mortgage; at all times it is the property of the person who bought it, who can sell or rent it or even re-mortgage it, within the legal limits.

The best loan is the one that best suits your possibilities and that requires keeping in mind the three essential factors that intervene in the monthly payment of your mortgage:

• Loan amount
• Type of interest
• Repayment term

You can choose the monthly payments you want to pay, choosing from a wide variety of types of mortgage loans. Some examples:

• Change of House Mortgage : You no longer have to sell your current home to buy the one of your dreams. You can buy the house and settle in it, having 5 years to sell the old one and paying the monthly fee as if you had already sold it.
• Mortgage Up to 50 years : Extend the term to pay a lower monthly fee.
• Increasing Installment Mortgage : Start by paying less and each year increase your repayment installment by 1% to 2.5%.
• Mortgage Final installment : Leave 20% or 30% of your total mortgage for the last installment of the loan and reduce the monthly payments.
• Armored Fee Mortgage : Pay a constant installment that will not vary throughout the life of the loan. It will have a variable interest rate, but what will change will be the repayment term, not the installments.
• Open Mortgage : Have a long-term loan with mortgage guarantee, for the acquisition of your usual home, which will allow you to have the amortized amounts available again, for any future financial need: home renovation, illness, car purchase, parking space …
• Mixed installment mortgage : Pay a compound interest of a variable part and a fixed part. You no longer have to choose between black and white, gray exists.
• Mortgage with lack of capital : Do you want to pay only the interest and leave the repayment of the loan for the future? This way you would pay much less than rent.
• Fixed rate mortgage – The interest rate on these mortgages will not change during the term of the mortgage for the original buyer.
• Multi-currency Mortgage: It is that mortgage loan that instead of being referenced to the Euribor or IRPH is referenced in another currency or foreign currency, for example: (Japanese Yen, Swiss Franc, British Pound, Dollar, etc.), Which allows us to take advantage of the low interest rates that prevail at that time in the markets of the respective countries, as well as the weakness of the exchange rate of the currency in question.

FOR SELF-EMPLOYED WORKERS:

• DNI / NIE
• Work contract
• Last 3 payrolls
• Laboral life
• Withholding certificate (IRPF) or income statement
• Last 6 months of bank statements (savings book)
• last loan receipt. (If applicable).
• Rental contract and last 3 receipts (If applicable).

FOR SELF-EMPLOYED WORKERS (SELF-EMPLOYED):

• DNI / NIE
• Last income tax return
• Last VAT quarters
• Annual VAT Summary (Previous Year)
• Last receipt of self-employed (Payment to social security).
• Last IAE receipt
• Registration of economic activities
• Banking transactions
• Last loan receipt (If applicable)
• Rental contract and last three receipts (If applicable)

• Rental contract and last 3 receipts (If applicable).

DOCUMENTATION TO BE PROVIDED BY THE SELLER:

• Photocopy of the title deed and an updated simple note.
• Last annual paid receipt of the Real Estate Tax (IBI).
• Last annual paid receipt from the Incinerator (solid waste)
• Last paid receipt from the community.
• Documentation necessary to contract the services and supplies of the house.
• Certificate of aptitude, in case the building has been required to pass the Technical Building Inspection (ITE).

In case of being a New Construction:

• Deed of declaration of New Construction and horizontal Division
• Certificate of occupancy
• Quality memories
• Plan of the house, with the specification of the useful surface and of the built with the measurements accredited by competent technicians.
• Location plan of the building.
• Documentation related to the guarantees of the house, with the specification of the guarantors, the holders of the guarantee, the rights of the holders and the term of duration.

The expenses in the purchase – sale are shared between buyer and seller

EXPENSES CHARGED BY THE SELLER

• The Plusvalía: it is a Municipal tax on the increase in the value of the land, which is paid each time a transfer of the property is made.
• Those derived from the intervention of a Real Estate Agent.

EXPENSES TO BE CHARGED BY THE BUYER

• • 8% Tax on property transfers in second-hand free homes. (VAT 10% on new construction homes). This amount is paid on the deed value.
  • 1.2% Approx. Documented legal acts (AJD). , this tax records the notarial documents of the value of the mortgage guarantee.
  • The mortgage loan deed expenses, if any.
  • Bank expenses: opening commission, insurance, the entity will inform you of the possible commission in case of early repayment.

• Notary Public: a mortgage loan deed and a deed of sale are made.
• Property Registry: the deeds are registered as you are the new homeowner and as you have a mortgage loan.
• Agency: it is the one who usually takes care of the administrative procedures: registration, payment of taxes …
• Property appraisal: the buyer has to pay into the appraiser’s bank account.

The total expenses in the purchase of a house oscillate between 9% and 13% of the deeded value.

Real Estate Financial Dictionary

Real estate law