Taxation

Buying a foreclosed home

Buying a foreclosed home

The appetite for owning a home has regrown in Spain, This is confirmed by the latest data (2015) from the National Statistics Institute (INE):

  • The purchases of homes registered in the records of the property increased by 23.6%.
  • Mortgages rose 24%.

Buying a home is one of the most significant events for a family economy, especially when Spain is one of the EU countries where a higher percentage of the population seeking access to home ownership. Pay once unthinkable, so most house sales are done through mortgage loans whose terms are very broad. Therefore, on almost all properties weighs a mortgage and when you want to buy one of these houses, the most common option is subrogated to it.

MORTGAGE SUBROGATION

We understand mortgage subrogation as the fact that a person becomes the holder of the existing mortgage on the house to replace the vendor.

To buy a foreclosed home, follow these steps:

  1. Ask the seller a copy of the notarial deed that accredits you as a homeowner.
  2. Obtained writing, requested the Land Registry a simple information note to confirm that the property continues to seller's name on it and does not weigh any garnishment, debts, charges, etc.
  3. If you obtained the information note of the Register, it is found that there are any charges, debts, liens, etc. on housing, the buyer can opt for one of two options:
    1. You can require the seller to lift or remove the burden and expense will be paid by.
    2. The buyer may be subrogated to the mortgage hanging over the property, ie, would become the owner of the mortgaged property. In this case we should inform the bank that granted the loan's approval of the subrogation. a deed of sale in which it is stated that the buyer gets the property with debt hanging over it is signed.
  4. Request the last tax bill or IBI (Property Tax) and proof that housing is aware of payment costs the residents. You have to learn what participation fee has housing costs the homeowners.
  5. Check that the house is not rented.
  6. By law, all expenses of the sale are paid by the buyer, except the capital gains tax.
  7. On the last and most important, we must bring home writing the notary to confirm before the law our home ownership.

RENEGOTIATION OF MORTGAGE

The owner of a foreclosed home can try to negotiate with the bank conditions thereof. The mechanisms that the law allows to improve the conditions of a mortgage loan are:

  • Novation: Returns to negotiate with the bank and change some of the conditions of the mortgage. This option is recommended and profitable since paying origination fees and cancellation almost never necessary.
  • Surrogacy: Is the transfer of the mortgage loan to another bank that offers better possibilities for the applicant. This procedure is more complicated and expensive than the novation because the client is the one who has to bear the costs of cancellation, opening, agency, notary and registration.

REQUIREMENTS FOR APPLYING FOR A MORTGAGE

A mortgage is a loan granted by a bank to buy a property, whether housing, local or other.

When a mortgage loan to finance the purchase of a home is requested, the bank must provide the following documentation:

  • DNI, NIF or card.
  • Last tax return (income tax).
  • In the case of employed persons, received last three payrolls.
  • In the case of self-employed, last three quarterly payments of income tax (Model 130).
  • In the case of the highest in the Economic Activities Tax (IAE, Model 036) self-employed.
  • Private contract of sale.
  • Simple Note updated Land Registry Property.
  • Last receipt of IBI.
  • Copy of the last deed of transfer of the property.
  • Certificate of the homeowners.
  • Home insurance.
  • Life insurance.

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