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Hi
When I enquired about taking on my builders (Polaris) loan the CAM Bank sent me an email saying that if I took the subrogated mortgage with them I would save the following amounts (in Euros): 400 valuation fee, 1,479 Tax Office, 1,500 Notary, 250 Registry and 190 Documents - amounting to €3,419 saying 'this charges must be paid because you are opening a new mortgage so you will have to pay all the taxes' (whatever that means), followed by In the CAM Bank all this has already been paid by Polaris for you.
Today I received an offer from them with costs detailed thus; Tax Office 1,198 euros, Notary 1,500 euros, Registry 496 euros and Gestion (?) 220 euros = €3,422
I am very confused so I called and was told that these fees were all payable TWICE but because it is a subrogated mortgage I only had to pay once. Are their any mortgage/legal whiz kids out there who can help me make sense of all of this???? PLEASE!!!!
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www.alhamagolfapartment.co.uk
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Yes, Spanish mortgages are an eye opener!! When purchasing with a mortgage, you pay stamp duty on the property and stamp duty on the loan. You have notarial fees for both the purchase and the mortgage. The property has to be registered at the land resitry and the Gestoria fees will be on the banks side. On the plus side, with a subrogated mortgage, you have no 1% set up fee on top of all the others that go with it.
HTH
Mark
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Thanks for that info. Boy it doesn't half add up. None of this 'you too can own a beutiful home for £80,000' malarky. More like £130k all in.
Thanks again for the info.
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www.alhamagolfapartment.co.uk
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Hi,
Subrogation of a mortgage will have some advantages.
You will not have to pay a valuation fee.
You should not have to pay 'AJD' or stamp duty on the mortgage which is not 1% of the amount borrowed, but 1% of your total anticipated repayments, as the builder will already have paid it, and you are merely transferring .his mortgage to your name.
You should not have to pay an opening commission.
However, you would be billed for notary, gestoria and land registry charges, as they all apply.
To be honest, if the loan to value is less than 70% CAM tend not to be the cheapest option anyway.
If you think about it, saving 2% now on up front costs will soon be eroded if you pay 0.5% more every year in interest.
A good deal at the moment, depending on circumstances, would be Euribor +0.7% ish. You can get Euribor +0.25, but that would typically be a young persons mortgage. ** EDITED - Please respect terms of posting **
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Arranging mortgages in worldwide
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Hi All
Does anybody know when you subrogate a mortgage what taxes you have to pay please?
Jojan
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This depends on teh bank in question and how much you are borrowing. If the bank has a 60% mortgage and you take this 60% there should be very little to pay in terms of the mortgage itself. Obviously Land Registry, Notary and Gestoria fees will be paid on the purchase of the property itself.
The bank should not charge an opening commission and may well already have the property valued.
BUT. They may well be charging you a high rate and have conditional insurances. You may save €3000 up front but over 25 years that is €10 per month. A reputable broker would ensure that if possible you got the best overall deal, not just headline rate/fees.
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Arranging mortgages in worldwide
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We are in the process of doing this ourselves just now. One advantage I thought was that the property does not need valued and with prices falling I was concerned that the amount of mortgage we could obtain would be reduced, and a higher cash sum needed, which I would prefer not to use just now.
Anyway, it doesn't seem a really bad decision so hopefully things will work out ok.
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How wierd. It says you've made 0 posts Camnmat, yet I see 5 if I do a search !
18 Apr 2009 10:42 PM
Camnmat
I've made 0 posts
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We are in the process of doing this ourselves just now. One advantage I thought was that the property does not need valued and with prices falling I was concerned that the amount of mortgage we could obtain would be reduced, and a higher cash sum needed, which I would prefer not to use just now.
Anyway, it doesn't seem a really bad decision so hopefully things will work out ok.
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I thought the number of posts didn't show until I made a certain amount. Might be a glitch. cant send a pm to anyone to report this.
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No, it clocks up from 1st post & I see 5 posts made in General forum by you.
How very odd.
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Hi Vantage
When you say the bank may have a 60% mortgage do you mean 60% of the price the present owners paid for the property? Sounds as if we have to be very careful about going down this route.
Jojan
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What I mean is that on a new property the builder or developer will almost certainly have taken a constructors mortgage and they are usually limited to 60% and subrogation may be worth considering.
It is highly unusual to subrogate on a resale.
This message was last edited by vantage on 4/20/2009.
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Arranging mortgages in worldwide
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Hi All
We are looking to purchase a property through subrogation of mortgage but the property has some debt so does anybody know if you have to pay tax on unpaid community fees, vendors+ valia tax, IBI tax, electricity etc what we really need to know is would we have to pay CGT on the items mentioned as the vendor cannot afford to pay the CGT on the sale so we would have to also pay that.
Jojan
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Hi Jojan,
CGT is 18% payable on the profit amount between the vendors declared purchase price and their selling price. Sorry if I am stating an obvious question but have you seen the deed to the property? i.e. the actual original declared price. Are you using a lawyer for this purchase? Of course I am sure you are aware that it is very important to know the extent of the debt you propose to take on and you may wish to negotiate all / some into your purchase price.
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Regards
Sharon
sharon@tmasspain.com
www.themortgageservicegroup.com
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Jojan
Look on this purchase in the same way as you would if you were buying in UK.....ask yourself the question? would I proceed if .........arose in UK purchase.....if not then ' take care' and look again.....lotd of choice just now
The mortage and the payment of the other debts can all be dealt with by your lawyer- it is the vendor who is liable for their capital gains tax not the buyer
They will have a liability in Spain and if tax resident in UK a liability in UK ...if you pay tax to the Spanish it will be offset against your UK liability.....quite complicated......certainly in UK you can not 'take over another persons tax liability 'and I supect the same in Spain......but once agreed with the Revenue & Customs, you can pay another persons tax
Complicated purchase transactions are for property dealers, not life style buyers.......too risky.....and you are buyung to enjoy yourself not for hassle!
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Jojan: Is it CGT or plusvalia tax what you have agreed to be paying? They are two different concepts.
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Hi Maria
It is all the oustanding debts which includes both of these.
Jojan
Thank you Rolandsbb & Sharonw for your thoughts, yes it is very complicated and many times we have thought 'should we shouldn't we'
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There will be no outstanding debt of CGT when you buy, just plusvalia. Capital Gains Tax is accrued yearly and has nothing to do with you meeting outstanding debts.
I would try not to committ to pay CGT ( 18%), which is something he needs to declare in his/her annual Income tax. That would be tooooo much for you as a buyer.
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Great news thank you very much for that, you are most helpful.
Jojan
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