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There is a mortgage out there just right for you in Mallorca - we can help you find it!
October 22, 2020

There is a mortgage out there just right for you in Mallorca - we can help you find it!

There are currently many people interested in buying property in Mallorca. Times of crisis are also times of opportunity, and those who know how to recognize them can increase possibilities of both closing the sale of a property, and investing in one. Although it is true that the market presents interesting and increasingly affordable properties, the purchase process can be on the tricky side if there is a lack of experience in this field. Being conversant with the current legislation applicable in each case is as important as knowing which documents are necessary to complete each step of the procedure. Please take a careful look at this list as it will help you clarify any doubts you may have at this crucial time for you in regard to your finances.

 

Some aspects to consider before signing a mortgage

While it is true that the stability offered by some jobs, such as that of civil servants or a permanent employment contract, can help avoid future mortgage payment problems, the most important thing is to be brave enough to take the risk of facing a long-term fixed cost. Bearing in mind that mortgages normally only finance up to 80% of the estimated value, it is essential to have the necessary savings to cover the rest of the operation. Therefore, depending on income and age, the bank will determine the quantity of each monthly payment as well as the maximum amount to be financed.

Any other debts we may have can also condition the granting of the mortgage. Therefore being able to prove a sound credit rating, i.e. other loans that have been repaid on time, is considered a positive factor in the assessment of new credit support. A bank guarantee from another person who doesn´t necessarily have to be a relative can be especially important in some cases.

It is with the aim of analysing our financial situation and prospects, this documentation is required when applying for a mortgage. Likewise, it will be necessary to describe the property and its legal situation, as well as to identify the persons involved in the transaction.

 

What are the required documents for a mortgage application (in Spain)?

As follows we are providing you with a list of the documents you may need to obtain your mortgage. To speed up the procedures prior to the obtention of the mortgage, we list the documents that both the applicant and the vendor party must submit as per the specifications of the application.

Documents to be submitted by the applicant:

Reservation Contract or Private Purchase Contract (this will always be required): if no such contract exists, the following information must be submitted to the administrator: the amount of the purchase; the amounts already outstanding and due; any additional agreements between the parties; the registered information of any other properties to be acquired together with the mortgaged property.

Proof of Marital Status  (required in the following cases): if the applicant is married under a community of property regime in Catalonia, the Balearic Islands or the Valencian Community, or is married under a separate property regime in the other Autonomous Communities, he or she will need a copy of the marriage contract registered in the Civil Registry. Separated or divorced persons will need the court judgment of separation or divorce, and the regulatory agreement registered in the Civil Registry. The registration of the documents mentioned in the Civil Register can be accredited with a literal copy of the registration of the marriage, which can be obtained from the Civil Register itself, or from the family book, provided that it includes the registration.

Home insurance: if you have a home insurance policy other than the one commercialised by the bank, you must provide it at the time of signature. Although a home insurance can be substituted to protect the mortgaged property, it is not mandatory for obtaining the financing. On the day of the signature, it will be necessary to bring the originals of all the required documents, together with your last payslip, if you are an employee, and a valid identity card. The sellers must also submit this updated document.

Documents to be presented by the seller:

- Property Deeds, whether we want to buy a house, or mortgage our own property.

- The last Annual Property Tax bill: if we buy a house directly from a financial entity the last 4 receipts will be needed. The local council can provide a certificate for the current fiscal year, which is also valid.

- Current certificate from the Community of Proprietors, showing that you are up to date with your payments: it can be issued by either the administrator, the president or the treasurer of the community.

- Energy Performance Certificate: usually issued by a valuer or any other qualified technician. It includes factual information on the energy characteristics of the property.

- Certificates in those cases where the home is free of any charges:

Issued by the bank (must be requested 30 days prior to signature):

  • Certificate of Outstanding Debt, when there is still money owed on the mortgage.
  • Certificate of Zero Debt, when no money is owed, but the mortgage is not yet cancelled in the Land Registry.

Issued by the court at the creditor's request:

  • Court order to lift the embargo, if the property has been confiscated by a private entity. There may be other debts on the property with a resolutory condition of economic content. Cancellation certificates from the lending entity may be required in order to cancel them.

- Certificate of Completion: if the property is not listed as completed in the Property Register.

- Form 650. Inheritance and Gift Tax: in case the sellers have inherited the property less than 5 years ago.

- Property Registry Filing with updated ownership: in the event of the death of any of the persons listed in the Property Registry Filing (known as "Nota Simple"), the inheritance must be inscribed in the Land Registry, and an updated Nota Simple must be submitted, together with the previously mentioned Form 650.

- Tax Residency Certificate, for sellers not residing in Spain. It is issued by the Tax Office.

 

Contact our real estate agency in Pollensa for advice on the management of your mortgage, and the purchase or sale of your home

The decision to sell your house in Mallorca, or to buy that property you like so much, may involve certain difficulties, which we have already commented on in our blog on legal procedures. That is why our real estate agency is advised by the mortgage specialist Mortgage Direct, our partner, who can advise you on any questions you may have. Please contact us if you would like to know more about this and other ways of increasing your assets and also if you have any further questions about selling your property in Mallorca. At Pollentia Properties we will help you find the best way to manage your properties in Mallorca.

 

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