PHASE 1 COMPLETION LOOMING

Hi  All, 

Just got back and things are really moving on.  Key Mare are definitely running the show now, Key Mur have been "annexed".  (personally we think that is a good thing - Bruce from Salinas de Vera will probably be ecstatic!)

Details will be coming out apparenly from Key Mare  about proposed completion date and inspection visits (snagging) which will done one block at a time and about 6 weeks before handover date.

Pool in the middle is almost tiled (see photos) hardcovers for car park area are going up, lots of plants are going in and for all those that do not know  Phase 2 has been released.

There are  slighly more blocks than original artists impression with solariums on all top floor apartments and   2 beds have  2 bath.  The big news is apparently one of the blocks (next to the leisure club, see photos) is going to be a hotel but no more information is available except that they say it will be the same style as the rest of the apartment blocks.

We also had a chat with Cajamurcia bank about the builders mortgage option,  Is anyone else going that way or has someone found a better deal - we would love to know!

We also applied for our NIE in Almeria, drove all the way there thinking it was going to be a long day and we were in and out in less than 5 minutes.  Had to have a drink to get over the shock of the efficiency!

Tried the new toll road from Murcia - brilliant for time, lack of congestion and speed but expensive at 11 euros one way.  Came back the old road as we were feeling miserly - wish we hadn't and won't again!

Regards

Paul and Sue

Hello Sue and Paul

Once again thanks for the photos - it really is coming to life now.

As regards the mortgage - I have spoken with a few banks and brokers and have looked at the subrogated developers mortgage too.  For what it is worth I have found it all quite tricky and confusing - and quite hard to get a straight answer on the costs.  Due to the relatively high set up charges and taxes the decision on the right mortgage is not one we would want to change in a hurry. 

The Subrogated developer mortgage has been offered at 0.75% above eurobor - this is the cheapest that i have come across for a 20 -25 year standard repayment mortgage.  The rate is fixed annually depending on the eurobor rate on the anniversary of the mortgage - so you could be lucky or not depending on what is happening in the euro economy.  Everyone else seems to be at 1.25% above, some with discount periods (Natwest at 0.5% above for 2 years but then locked into a variable rate).  There are some longer term interest only deals around (10 year) but with higher interest and costs.

They have offered a straight 20 year repayment or a 2 year interest only followed by 18 years repayment.  They are offering 80% based on the developers valuation of 2 years ago - if this works then you don't need to carry out a new valuation and save a few hundred euros apparently.  They have also said that the bank does not charge to receive funds from the UK.

Their 0.75% set up fee is also cheaper than most (1% generally) although i have heard that these fees are sometimes negotiable. 

I also understood that the developers mortgage should be free of the tax on the mortgage deed (I have been told that this is between 1&2% but noone seems to be able to confirm the exact number), however they say that there still is a tax but at a lower rate (percentage of borrowing).  It sounded like a 50% saving but i am trying to work out where the numbers come from.  There are also notary fees etc, again i am having trouble working out why they come out where they do.

All in all - it sounds quite good to me - but the other consideration is the wealth tax on equity in spain - again as i understand it (and could be wrong) this tax is payable annually on the value of the property less mortgage debt.  If this is correct and interest only mortgage will maintain the debt level and reduce the tax, a repayment mortgage will pay off the sum so every year you own more of the property and pay more tax.  Hopefully there is an accountant reading this who can confirm whether this is rubbish or not.

The subrogated mortage allows for early repayment sums to reduce the debt but a 1% charge (i assume on the initial amount) is payable if redeemed early.

If this makes sense - it is only my understanging following conversations with a very helpful Virginia at their office, but not fantastic english and my spanish is shocking - so it would be worth confirming every word with someone who knows what they are talking about.

Are there other considerations worth thinking about or other deals buyers have secured ???

Thanks

David

 Well it is  certainly moving on.  Good to see some more  up to date photos we will be going out on the 14th  and shall get some more photos

speak to you when we get back

Kind regards Brian and Sue

Hi David

Thanks for the feedback on the mortgage,  we must admit it is confusing when compared to the way things are done here.  You are right Virgnia is really helpful.  She has a degree in English and has lived in London and to be honest we didn't have the nerve to try out our spanish on her,  it could have been embarassing!

We sat with her in the office for a good hour and a half going through the options and to be honest the bank seems really flexible (proabably because they want our money). She offered us the same as you,  a 2 or even 3 years interest free mortgage,payments monthly/quarterly to suit,  payable by internet banking or by  cheque in the post! . Also there was an option at the end of the interest free period to pay back the capital  of the 3 years in one payment or spread it over the remaining period of the mortgage and lump sums could be paid to reduce the mortgage at any time without penalty providing we do not cancel or redeem early then penalties were due.

She did offer us a fixed rate, over 3 years as well but the interest rate was obviously higher.  She also explained that we could get an even better rate on the mortgage if we took out additional products,  for example house and contents which worked out at about 300 euros (to cover cost of rebuild and approx 5,000e in home contents).  Also credit cards, life insurance was available and each one knocked a bit off the interest rate over euribor.

The saving by taking the subrogated mortgate was about 9,000 + euros  (14,000+ if a normal mortgage was taken but this was reduced if taken with Caja Murcia to £4000+ eruos) based on the valuation of our 2 bed/1 bath apartment but you are right in that you do not mess with the option once you have taken it because, if you do ,  you have to negotiate a new contract for new money or new lending terms,  that means tax payable on the property and fees to the notary.  She didn't recommend it.    We liked her and found the trip really worthwhile.  But yes you are right we need a good Spanish accountant!  

We did run into a couple who went with a british mortgage (but they had paid off their english home) and also a couple who took a repayment one with BanCaja (i think) instead of the subrogated one but we never got the nitty gritty why it was a better option.    

Decisions, Decisions and yes please if anyone knows anything more - we,  too, are interested to hear.

Hi Sue and Paul

It sounds like Virginia offered a more flexible range of mortgage products when you went to the bank compared to my discussion with her on the phone.  Did she actually breakdown the fees and if so do you have the percentages for fees and taxes - when she went through it with me the saving did not seem to be as high (at best a couple of thousand euros) - have you got a list of the various elements of cost/taxes against the mortgage ? It would be really helpful to compare notes as i seem to get a different answer depending on who I speak to. 

On top of IVA (7%) there seems to be stamp duty (1.5%?), land registry fee (i don't know how this is calculated), notary fee (same again), mortgage set up fee (0.75%), Mortgage deed tax (?), plus the insurances that they offer - There is a story on the viva-almeria website were someone signed up to the banks insurance but was not aware that they had agreed to pay 20 years insurance up front!! They only found this out at the point of completion. 

Sorry final questions - did Virginia spell out the process from this point and how long it will take ? 

Unless someone pops up with a better deal - this seems to be the best deal around.

Thanks again

david

Hi everyone. We've only just found this message board. We bought a top floor end apartment in block 2 back in October 2005. Unfortunately we've not been able to go back out since due to work committments (setting up a Physiotherapy clinic). We bought through Masa and everything was going ok. Over the last 6 months we've struggled to get much info out of Masa and our solicitor's been next to useless (after the 1st one went on maternitiy), with very few replies to our questions and correspondance. However its been great to see some of the pics posted if anybody has anymore recent ones we'd be grateful if you could e-mail us wensley.whitehead@tesco.net 

We bought the appartment, not sure if it would be a short term investment, selling before completion or if we would keep it and rent it out. Still not sure. We've not been given much encouragement on the rental potential when contacting local estate agents which as put us off.  If anybody has some advice or information on this it would be appreciated. 

 We've not had much advice from Masa in relation to mortgages i presume from reading the messages that subrogating the developers mortgage would be the best bet? Research i've done suggests this, as long as it's a competitive deal. We'd be grateful if somebody would be kind enough to send us any contact details of the representative from the bank offering the developers mortgage. I presume it is the lady mentioned in the messages. Again we've asked our agent and solicitor to find these out, but haven't had a reply. Obviously time is of the essence with completion looming (we were told a month ago end of July).  We must admit after seeing the pics it's definately convincing us to keep the apartment, especially after our 6 year old daughter got excited at seeing it.  it looks like it will be great place for family holidays (we also have a 2 year old son). 

Thanks Steve & Helen Wensley, Littleborough Lancashire

Hi  for anyone who  needs it and doesn't have it !

Virginia Martinez Gracia       :

502 Vera   :     Telephone 950390575    and Fax 950390529   (prefix with Spanish IDD code)

1c6@cajamurcia.com

Hi Sue & Paul,

Jamie here! It was good to see you last week and I'm glad that everything is going well (It sounds like your worries about the NIE were unfounded and all went very smoothly!). Ive been reading the thread and got my finance guy in the office to put in his opinion. And below is his response......... Hope all well at home and that i see you again next time you're over. jamie p.s. finally got a good taxi guy for you and your daughter when you're over next.

"Subrogation - There is no tax (Impuesto sobre Actos Juridicos Documentados) to be paid provided that the buyer takes over exactly the same mortgage the builder set up originally (same amount, same terms).  The mortgage conditions will be exactly the same as the developer mortgage and there is no set up fee.  However, there is normally a subrogation fee - this is whatever had been agreed when the builder took out his mortgage.  Notary and registration fee will always have to be paid.  If one intends to take out a mortgage greater than the actual builder's debt on the property then the Impuesto sobre Actos Juridicos Documentados is payable on the extra amount taken - this tax is 1% of one's loan responsibility i.e. amount owed plus interests, costs, etc. - roughly speaking it works between 1,5 an 1,6% of loan. If one's intention is to have an interest only mortgage for as long as possible then one should consider going elsewhere as CajaMurcia does not normally go beyond 2 years interest only period and in any case remember that to save on the tax (Impuesto sobre Actos Juridicos Documentados) one must simply take over a mortgage with the same conditions as the existing one. It is very unlikely the builders mortgage is an interest only one; and hence there would be a new mortgage and new set up fees would be applied. If you need or want a longer interest only period, it might be better to look elsewhere (nowadays some banks are routinely offering extended periods of interest only payments - one upto 30 years!)."

Hope this helps.