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As with any property purchase, whether it is an apartment or front line villa, the financing of it has to be given serious consideration. You might be in a position to purchase a property outright with no additional finance needed, or you might want to consider the various mortgage options available.

It is sometimes possible to obtain a mortgage in the UK against the home you already own, which will give you enough capital to purchase in Spain. Assuming that your income is in Sterling and you have equity available, this maybe your favoured choice.

Another consideration would be to obtain a Spanish mortgage. This would be against your property in Spain and be in Euros. Spanish mortgages can be set up easily, especially with us to assist you. Please see additional information and flow charts below for further information.

Spanish Mortgage Information

Mortgages can be facilitated very easily while in Spain, but a number of documents must be provided to the bank in order to accommodate a smooth transaction. Please note that originals of everything will need to be shown and copies will be taken at the bank. Also, documentation can vary from bank to bank.

     
 

You will need:

  1. Passports - which you will have with you in any case.
  2. Driving licences.
  3. If Employed: Last three months pay slips and 2 years P60's.
  4. If Self-Employed: Last three years audited accounts, tax returns and accountants reference.
  5. Expedia report
  6. Work Contract
  7. Last 6 months Bank accounts
 
     

Mortgages may be taken out for up to 70% of the bank valuation if you are a non- resident. 80% if you are a tax resident in Spain. Normal terms for loans are anything up to 20 years. Depending on the bank, the number of year's term of the mortgage can be extended. The Euro mortgage rate is normally around 5% variable, but will obviously fluctuate a little.

When taking a Spanish mortgage you will need to consider as well the additional costs involved for arranging the mortgage, normally around 3%. The bank will advise you of the exact cost when applying. The costs will cover the opening fee, valuation fee, land registry and notary fees. A mortgage can be arranged in 2 - 3 weeks.

 

Investment

No matter why you have decided to purchase a property, you will always find it to be a good long term investment. If you are looking to purchase solely for investment rather than a holiday home or permanent living, there are a number of things to be considered.

Location has to be one of the first considerations, closely followed by whether to buy off plan or a resale, as there are pluses and minuses in both.

Location
You've decided on the Costa Blanca area, but you now need to narrow it down to preferred towns. Once you have done this, then actual location of the property will be next. If you are looking to rent out your purchase to make extra income then ideally you should consider being close to the beach, a golf course, restaurants and nightlife. Also, it doesn't hurt to be within 45-60 minutes of the airport. For maximum potential your property should have a minimum of 2 bedrooms and a pool or access to a pool.

Off Plan
This type of property appeals to the true investor, especially if you can get a pre-release deal where you will pay the lowest price possible. You will make stage payments and get a nice modern, brand new property at the end. The down side is that you will have to fit it out and cannot start to rent until this is all completed which could be 1-2 years. On the up side, from signing the contract to actually receiving the property, the value could have increased considerably.

A true investor will be looking to sell the property on before completion and make a quick profit. If this is your aim, then you need to check that the builder is agreeable to this before you sign any documents, as not all builders are willing to do this.

Resale
With a resale property what you see is what you get. The property is finished, has generally had any problems sorted out and is ready to move into. Completion can be between 4 - 6 weeks assuming that your finances are in place. Often resales are sold part or fully furnished, so can be ready to rent immediately you take possession. You can also make an offer, which may or may not be accepted.

Income
Whichever option you choose, the income you receive cannot be guaranteed whether you look to sell on or rent. Ideally, a nice well priced property will sell in 3 - 6 months, however, if you are looking to price the property for maximum return this can be longer. Likewise with rental, no one can guarantee how many weeks rental you will achieve, but it is fair to say that in the prime weeks of June, July and August there are never enough properties available in the popular areas. The alternative to this is a longer term rental. Whilst you won't get as much income as you would with weekly rentals, you will have the advantage of knowing how much you are going to receive each month and won't have to pay for the maid and cleaning service. The other advantage of weekly rental over long term is that you can use the property for the odd weeks, where as a long term tenant isn't really going to be happy to share.

If you are looking for investment properties, contact us with your requirements and we can provide suitable properties for you.

Please note recent changes mean Transfer tax or  IVA is now 12% not 7% as previously.

                                                                                                                                                          BUYING A NEW PROPERTY.

 

                                                                                                                                            BUYING A RE-SALE PROPERTY.

 

 

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(Tel.) 0034 966 492 335
(Mob.) 0034 600 541 452
Fax (Fax.) 0034 966 492 012
info@molinovillas.com
Skype (Skype) MOLINO.VILLAS
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