In this entry we are going to explain the most important aspects in relation to the purchase of a home and whether it is done with a mortgage. In another entry we will explain the most relevant points from the seller's point of view.
BUY AND SELL:
When purchasing a home, there are different important issues that the buyer must take into account:
1) The deposit or pre-sale contract.
It is a contract regulated in our civil code through which both parties commit to the future purchase of the home, and a price is paid as a deposit so that the seller is obliged to keep the home for the buyer during that period of time. In case the buyer finally decides not to buy, he will lose the deposit; On the contrary, if the sale is not carried out because of the seller, he must compensate the buyer with double the amount paid as a deposit.
2) Housing in a community of owners
When we are going to acquire an apartment that is part of a community of neighbors, we must not only make sure that the seller is up to date with the debts with the community of owners, but it is also interesting to obtain the latest minutes of the owners' meeting to Find out possible spills.
It is also important to know its internal rules before proceeding with the purchase and sale.
3) Simple registration note
It is important to request a simple note from the Property Registry to know exactly the real status of the home for registration purposes. Possibility of charges or joint ownership.
4) Hidden vices
Our civil code grants the buyer 6 months from the time the sale is made to locate any defect in the property that the seller has hidden so that they can claim its repair or even resolve the sale.
5) Expenses
For the sale to take effect before third parties, it is necessary to carry it out before a Notary and subsequently take the deed to the corresponding Property Registry for its correct registration. These expenses are usually borne by the buyer, unless otherwise agreed.
The buyer must pay the Property Transfer Tax, which will vary depending on the autonomous community. In Galicia the tax rate is 10% of the value of the sale. If it is the first sale, VAT is paid and not this tax and Galician legislation provides for bonuses in certain circumstances.
MORTGAGE:
If we need financing to purchase a home, we must mainly take the following aspects into account.
1) Interest rate and terms
The longer the term, the more interest we will pay in the long run and the more expensive the loan will be.
The reference interest rate is the Euribor, and is currently below zero; so the bank is interested in offering a fixed rate. Remember that the bank will always offer you what interests them. It is important to know how far they can go, both with a variable interest and with a fixed interest.
It is common for them to play with the linkage, that is, they offer you lower interest rates if you contract products in exchange. Be careful, because sometimes contributing to a pension plan or spending a credit card can be more expensive than a slightly higher interest rate.
2) Products to contract
In line with the above, the banking products that can really benefit you and help you lower your interest rate are:
Life insurance (highly recommended if you have a family, in case you die or become disabled)
Home insurance.
Payroll direct debit
But be careful with other products such as credit cards that you are forced to use or pension plans that probably do not interest you due to your age.
3) Abusive clauses
Be careful with abusive clauses, specifically those that are currently the subject of litigation: Expenses, floor, late payment interest rate and early maturity.
You have the mortgage deed at your disposal for three days before signing, at the notary where you are going to sign it, and remember that the notary is obliged to inform you and ensure that you understand what you are signing and, where appropriate, negotiate.
4) Establishment expenses
Currently, after the latest ruling of the Supreme Court in this regard, the expenses that the bank must pay are: half of the notary, property registry and management.
There is no escape regarding the Tax on Documented Legal Acts, which will vary depending on the autonomous community. In Galicia we pay 1.5%.
Others, such as appraisal, have not reached the supreme court, but many courts have already blamed the bank.