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A mortgage signing may not be a simple task, as it can take time and knowledge about every detail implied. The decision must be the result of a thoughtful and well calculated process.

Having decided on the property to be purchased, it is time to come to numbers and deal with banking institutions. Make sure to comply with the profile needed as bank entities usually stablish some requirements for loan applicants, such as, employment contract, annual income and age. Alongside, please consider the following aspects,

Other remarks when taking out a mortgage,

– Ask for the right amount.

Experts advise to ask for up to 80% of the appraisal value of the property so as not to encounter future economic problems when dealing with payments. In addition, it is quite unusual for a bank to grant 100%, as they may be assuming a risk.

In addition to the price of the apartment, please consider other associated expenses, such as the Notary appraisal, Property Registry and 10% of the ITP (Property Transfer Tax).

– Fixed, variable or mixed interest rate.

Perhaps no option is better than the others, only changing circumstances should lead to make a decision.

Fixed interest rate usually offers more security. However, if interest rates may increase, the amount paid would be always pay the same until the mortgage is fully amortized. The only disadvantage is that the payabble interest may be higher as bank entities assume the risk in the event of a rise in interest rates.

For variable mortgages, Euribor fluctuations must be assumed. When it is low, the mortage will get cheaper, but if it goes up, the monthly fee will also increase. Finally, the mix interes rates combines a fixed one at the beginning to change over time, to be variable.

– Amortization table.

The bank entity has to present a summary reflecting the outstanding amount to pay, fees, and payment periodicity, and above all which amount is intended to repay the principal provided, and which corresponds to interest payment.

–Waiting period.

This period corresponds to a term when no payments are done, or the amount is lower because no capital is being amortized. When applying for a mortgage, it is important to know if this period is included, and if there will be any additional interest generated, which will have to be payed later.

– Added products.

Along with the mortgage, banks usually include “compulsory” life and home insurances.

Our advice is to negotiate properly this part, find out any associated costs, and if anything is compulsory to evaluate other alternatives.

– Negotiate for favourable conditions.

In case of not being able to face the mortgage cost, is it possible to provide a nonrecourse debt? Is there a possibility to subrogate to change the creditor, that is, to apply to other bank entities for better conditions? Make everyting clear from the beginning and negotiate all aspects involved.

– Read the small print carefully.

Do not sign a mortgage without reviewing it in detail, and have previously read everything in the document. If there are any doubts, the best to do is to hire the services of a real estate expert or an advisor, so they can assure that what the contract contains is what you have negotiated.

– Compare.

Do not stay with the first bank entity willing to provide a mortgage loan. It is advisable to compare and sign with the one which offers the most advantageous conditions when taking out a mortgage.

From Hermes & Mathew we advise to,

• Check at the Property Registry if the property carries previous loads,

• Ask for a certificate from the community to confirm that nothing is owed,

• Obtain a certificate of any pending payment if the property has a previous mortgage,

• Get the habitability and energy certificates

All these documents will also be submitted by the seller at the time of the selling signature.

If you any more doubts about the steps to take into account when taking out a mortgage, have a look at the Guía de acceso al préstamo hipotecario by the Bank of Spain.

Please keep in mind that with Hermes & Mathew everything is much easier. Since our team will take care of all the necessary steps for the purchase of the property, as well as offering all the advise from bank entities with the more favourable conditions on the market.

Also remember that Hermes & Mathew offers a large portfolio of properties for sale, according to all your requirements.