| FAIRWAY VILLA, PHASE 1 |
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| Location: HACIENDA DEL ALAMO |
| Floor space: 225 sqm |
| Bedrooms: 5 |
| Purchase price 795.000 Euros |
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| RESIDENCIAL SOL Y MAR |
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| Location: COMPLEJO - LOS NIETOS - MAR MENOR, MURCIA |
| Floor space: 102 sqm |
| Bedrooms: 3 |
| Purchase price 219.000 - 259.000 Euros |
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| FAIRWAY VILLA - ALHAMBRA |
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| Location: TRAMPOLIN HILLS GOLF RESORT |
| Floor space: 138 sqm |
| Bedrooms: 4 |
| Purchase price 299.000 Euros |
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| VILLA LOS BELONES |
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| Location: LA MANGA CLUB |
| Floor space: 390 sqm |
| Bedrooms: 5/7 |
| Purchase price 795.000 Euros |
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| VILLA LOS MOLINOS |
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| Location: LA MANGA CLUB |
| Floor space: 100 sqm |
| Bedrooms: 2 |
| Purchase price 345.000 Euros |
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| CORAL 4 E, PHASE 2 |
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| Location: HACIENDA DEL ALAMO |
| Floor space: 111 sqm |
| Bedrooms: 2 |
| Purchase price 269.500 Euros |
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Partly Cloudy
Temperature: 8°C
Humidity: 71%
Wind: WSW at 11 km/h |
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« Overview
| THE NEW MORTGAGE LAW |
September 10th, 2007 |
The reform of the Mortgage Law is not yet a reality since it must first
pass through the Council of Ministers and, subsequently, through the
Spanish Congress but it is expected to bring about important changes to
the current mortgage legislation.
The change, which is highly necessary since the law has not been
reformed since 1946, proposes alternatives with respect to the notary
and registration fees as well as the commissions for cancellation,
subrogation, and novation – these will be reduced by up to 40%.
The new regulations will also allow more sophisticated products to be
put on the market such as reverse mortgages and combinations.
In general terms, the most important changes to the law can be summed up as follows:
- 40% reduction of the notary and registration fees for cancellation, subrogation, and novation.
- Implementation of reverse mortgages for persons over 65 years of age.
- Reduction of the commission for premature loan cancellation to 0.5%.
- Expert appraisers will have to be more independent.
- Banks will have to provide detailed information about their products.
The reform seeks to improve the Mortgage Law of 1946 and the changes
should coincide with the increases in interest rates that have been
occurring since the start of the current year.
While being practically unheard of in the UK as far as mortgages are concerned, these processes are common in Spain
There are some of differences between Spanish mortgages and those
offered by banks and Building societies in the UK. Take a look at the
processes known as Subrogation and Novation which, while being
practically unheard of in the UK as far as mortgages are concerned, are
common practices in Spain.
First, a word of warning; although the terms Subrogation and Novation
exist in English, they have opposite meanings in Spain, which leaves
room for confusion. Strictly speaking, under English law, a subrogation
is where your rights are transferred to another party under a contract,
but the actual contract remains with you (for example, if you claim
under a contract of insurance when your car is stolen, your rights to
that car are then “subrogated” to the insurance company should it later
be recovered). A novation under English law occurs when there is a
complete substitution of one party in a contract for another without
creating a new contract. For example, halfway through the agreed term
you transfer your mobile phone contract to another person and the
original terms and conditions continue to apply while the new party
assumes your obligations for the remainder of the term the contract is
then said to have been “Novated”.
In Spain it is the opposite and a subrogation occurs when one party
takes over a contract of another, what we would call a novation under
English law. You are most likely to come across subrogation when
purchasing a property on which you require a mortgage, as you would
literally take on the responsibility of repaying any existing mortgage
the current owners have for the remainder of the term together with all
the terms and conditions they originally agreed to. The mortgage is
simply transferred completely into your name.
While this may seem a peculiar practice if you are used to the UK
market where you would simply take out a new mortgage in your own name,
there is a good reason for it in Spain; to lesson the tax burden.
Spanish tax can amount to as much as 3,600€ on a mortgage of 200,000€,
even before administration expenses are added. However, if you are
simply taking over responsibility for the repayment of an existing
mortgage (subrogation) and not creating a new one, then this tax has
already been paid which in turn may mean substantial tax savings for
you.
News provided by www.costacalida.com
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