[adiep]

Hi folks, Im looking at buying a place and the owner has said I can take over their mortgage rather than get my own. Apparently I can save on some costs (not sure what though, as I would have thought I cant avoid the taxes this way)

I think the mortgage is now underwater in terms of property valuation, for example lets say the mortgage was for 300k and now the property is worth 200k and the outstanding on the mortgage is around 200k.

Apparently the bank are ok to do this, so I presume its quite common in Spain? Does anyone have any thoughts?

[Anonymous]

Hi adiep,

I have heard of this before – you could also become liable to any other debts outstanding either against the people that own the property or any judgments that may be registered against the property.

Angela

[Anonymous]

Hi adiep,

I have heard of this before – you could also become liable to any other debts outstanding either against the people that own the property or any judgments that may be registered against the property.

Angela

[Anonymous]

The cost savings are the opening comission for the mortgage that that the bank usually charges. This is generally around 1% of the loan amount. Taking over the mortgage means you are bound by it’s terms and conditions, so loan value, term, interest rate etc of the previous buyer.

Personally I’d look into getting my own mortgage unless the current mortgage conditions are extremley good.

[Anonymous]

The cost savings are the opening comission for the mortgage that that the bank usually charges. This is generally around 1% of the loan amount. Taking over the mortgage means you are bound by it’s terms and conditions, so loan value, term, interest rate etc of the previous buyer.

Personally I’d look into getting my own mortgage unless the current mortgage conditions are extremley good.

[Anonymous]

I believe that it’s called subrogation (or subrogacion in Spanish, I think).

As said above it saves you the opening commission, I have heard the some banks will consider renegotiating the terms of the mortgage when subrogating, I guess it’s worth a try. You should definitely shop around, and make sure it’s a good deal for you.

[Anonymous]

I believe that it’s called subrogation (or subrogacion in Spanish, I think).

As said above it saves you the opening commission, I have heard the some banks will consider renegotiating the terms of the mortgage when subrogating, I guess it’s worth a try. You should definitely shop around, and make sure it’s a good deal for you.

[Anonymous]

The advantage of continuing a current mortgage “subrogacion” is too aviod the set up taxes of the mortgage deed. These taxes are called ADJ (Actos Documentados Juridicos) commonly known as stamp duty. The tax represents 1.7% of the mortgage amount.

All other charges (notary fee, land registry inscription, gestoria) are the same as taking out a new mortgage. In some cases banks will eleminate opening fees but this is something you would have to negotiate as it is not a given.

Either way any mortgage offer will be based on your ability to repay the mortgage and that means the bank assessing your income.

[Anonymous]

The advantage of continuing a current mortgage “subrogacion” is too aviod the set up taxes of the mortgage deed. These taxes are called ADJ (Actos Documentados Juridicos) commonly known as stamp duty. The tax represents 1.7% of the mortgage amount.

All other charges (notary fee, land registry inscription, gestoria) are the same as taking out a new mortgage. In some cases banks will eleminate opening fees but this is something you would have to negotiate as it is not a given.

Either way any mortgage offer will be based on your ability to repay the mortgage and that means the bank assessing your income.

[adiep]

Thanks a lot guys, very much appreciated.

So in summary it can work so long as I:

– renegotiate the terms to ensure they are desirable
– ensure no fee for opening
– ensure there are no other liabilities attached to the mortgage

That about it? Sounds worth a try anyway.

[adiep]

Thanks a lot guys, very much appreciated.

So in summary it can work so long as I:

– renegotiate the terms to ensure they are desirable
– ensure no fee for opening
– ensure there are no other liabilities attached to the mortgage

That about it? Sounds worth a try anyway.

[Anonymous]

adiep, you’ll also save on the expense of a mortgage valuation ………….

normally worth taking over exisiting loan anyway as save on costs as explained to you by some others!!!!!!! plucking up the courage i see???? 😆

[Anonymous]

adiep, you’ll also save on the expense of a mortgage valuation ………….

normally worth taking over exisiting loan anyway as save on costs as explained to you by some others!!!!!!! plucking up the courage i see???? 😆

[Anonymous]

FWIW, I just tried to subrogate a mortgage, my experiences were that the bank (cajamar in this case) were very helpful, and made no charge for setting up the transfer. BUT, the existing mortgage was very expensive, currently 3.75%, and reducing to 3.25% shortly. The bank claimed that this was because it was a non-resident mortgage, and had 1% added because of this. We are resident, but even so that bank wouldn’t change this surcharge.

So, it would be a really bad deal for us. A new mortgage is less expensive inside 12 months, so that’s what we will do.

[adiep]

How the hell do they justify charging non-residents more. That’s just disgraceful and surely has to be against EU regulations.

[peterhun]

@adiep wrote:

How the hell do they justify charging non-residents more. That’s just disgraceful and surely has to be against EU regulations.

Its a quantifiable higher risk and more expensive to recover the debt if things go wrong. So I think they are entitled to charge more.

[Anonymous]

Perhaps, it is more risky & for that reason the loan to value is higher. A Spaniard can perhpas borrow upto 90% & non resident 85%, 70%, 65%.

In Spain a non resident is charged extra at all levels.

[Author]

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