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Hi All

Can anyone shed some light on this......my lawyer seems to telling me that if I get my mortage through a UK bank , GE Money (even though based in Spain as well) for example my costs are significantly more than using the developes mortage or one in Spain.

At the moment I fully understand that I have to pay IVA 7%,Stamp Duty 1%, ITP Transfer tax (property all in my name from a friend) Legal Fees,Misc,NIE,Provision of Funds,Utility Management fee,Community Owners Fee and Provision of Plusvalia which totals €29,279 euros, thats what I pay if I use cash or a Spanish mortgage from the developer.

However  my lawyer now informs me that if I use another Mortgage company (GE) that I would also have to pay the following fees on top of the above fees which are ; Notary fees €700, Land Registry €600, Gestoria €300 ,Stamp Duty extra 2% €2,924, Legal Fees €100, Commision on opening a Bank €1,462 ,House Insurance €500 totalling an extra €7,500 euros.

Has anyone else come across this and is this correct?  Some people tell me it is as its to stop using a Bristih bank so they charge more and to stop money laundering.

Right now my taxes,fees and costs stand at €43,000 does this seem correct to you?

Thanks

Mike

Mike

If you go to "Tools" at the top of the page, click, and then click on Property Calculator.

That should give you a good idea of what the costs should be. Those costs you detail seem high to me..................

Mike, they seem very high.  At present I have not paid anything like that amount....but, maybe the rest is to follow?

I have a meeting with my solicitor on Monday I shall enquire then if their are to be more charges...but to date he hasn't mentioned anything and I am most certainly not expecting anything, except for Insurance which is an option and of course and the community charge.  At the moment he has confirmed that we will be using builders supply utilites. 

One of your charges is commision on opening a bank account €1,462  . 

Edited to add   Sorry, I forgot about the wealth tax

Mike

I have been looking at your costs again, and they might be right after all. Sorry, I should have looked more closely.

If you buy a property in Spain you have all the rituals of Notary, Land Registry, Stamp Duty, IVA etc.

However, that's if you pay cash.

If you need a mortgage, as most of us do, then it's feeding time again, because you then pay a seperate further round of costs, yes, youv'e guessed it, Notary, Land Registry, Gestoria fees, Bank Fees (usually for drafts and transfers) on top of the first round. Clever, eh ?

The bank opening commission of 1% of the loan amount seems to be standard, so it's a €1000 for every €100,000 borrowed.

Also watch out for Mortgage Tax, Management Fees, Mortgage Retention Amounts, Redemption penalties, and that's before you get to the actual interest rate. Licence to print money, really.

I'm going through all this just now and it's really an eye opener. I ended up contacting a specialist Spanish mortgage broker who has been superb in sorting out the bad boys.

She has saved me at least €2K on costs over my first choice bank, (a name we all know and love) and 1/4% off the interest rate as well. Well pleased so far.

I thought the fee was going to be big, but no, a flat €300, and the paperwork is very professional and actually nice to sit down and read. No, scrub that. I refuse to admit that at my age.

The property I'm buying already has a builders mortgage already in place, and, yes, it is cheaper in costs, but I can't change it, has a higher interest rate, carries a high partial redemption rate, and so at first look it's very attractive, but then you do a bit of diggin'....

Not sure about the advertising rules here - if anyone wants to pm me for contact details please do so - well worth checking out even if you don't do anything but I would be suprised if you don't save something.

Will

Hi WIll thanks for reply I have since asked a friend who is a lawyer and has confirmed these costs and what you are also suggesting.

More costs excelelnt

Hi Mike,

Just to pick up on your post and confirm, to save on up front costs it is always a cheaper option to subrogate the developers mortgage, it is already in place and mortgage tax has been paid. The savings are inded on the notary and registry fees which are approx. halved, there is usually no bank opening fee (some lenders apply a subrogation fee, again, half of the normal rate) and there is no stamp duty on the mortgage to pay.  Also what you did not mention in your post below is the valuation fee which is not payable should you opt for the developers mortgage because it is a % of the purchase price rather than the value.

All these extra costs are payable regardless of what lender you use outside the developers, beit a UK, European or Spanish lender and nothing to do with GE Money being a British lender (in fact ultimately American!).

When you subrogate the developers mortgage you are taking on the exact terms, conditions, rate etc and for some buyers these are not suitable for their requirement. e.g. long term Interest only is rarely available.

Sharon

Thanks for this, yes I looked at teh developers mortgage and there costs were pretty rubbish hence the other people I looked at.

BTW are you a laywer by any chance

Hi Mike,

Pleased to be of help, and at the risk of flouting the advertising rules (sorry Justin!) to answer a direct question - No, we are mortgage brokers!

Also watch out for hefty life assurance policies which in many instances are attached to developers mortgages!