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We have negotiated with the lenders in these cases and have come to the conclusion that it would be more economically viable to the lenders just to make losses now rather then pursue the debtors in court and assume further costs in legal proceedings.

These are genuine cases and there is only a limited amount of time in each case.

Please contact us for further information

info@pruplanet.com

or call telf. 0034666557878

The down payment is the part of the purchase price that the buyer pays in cash and does not finance with a mortgage. The larger your down payment, the less you will need to borrow. The less you need to borrow, the smaller your mortgage payments will be. Lenders often view mortgages with larger down payments as more secure because you have more of your own money invested in the property.

Mortgage amount and term

The mortgage amount is the amount of money you borrow from a lender to pay for your house. The term is the number of years over which you can pay back the amount you borrow. The length of your mortgage repayment period will directly affect your monthly mortgage payments. For the same mortgage principal amount, you will find that the shorter your repayment period is, the higher your monthly payments will be, but the total interest you pay over the life of the loan will be less. On the other hand, the longer your repayment period is, the lower your monthly payments will be, but the total interest you pay over the life of the loan will be more. By extending payment over 30 years, you keep your monthly housing costs low. If you can afford higher monthly payments, you can select a mortgage term that is shorter.

During the term of your loan, you will pay back your mortgage by making regular monthly payments of principal and interest. In the early years of your loan, most of the money you pay will be for the interest you owe. Toward the end of the term of your loan, you will be paying primarily principal. This type of repayment method is called amortization.

Fixed interest rate and adjustable interest rate

Some mortgages have an interest rate that is fixed for the entire term of the loan. One advantage of a fixed-rate loan is that you know your interest rate will never change over the term of your loan. An adjustable-rate mortgage (called an ARM) has an interest rate that varies during the life of the loan. The interest rate with an ARM may increase or decrease based on market interest rates. Consequently, your mortgage payments may go up or down. Also called: Adjustable Rate Loans, Adjustable Rate Mortgages, Flexible Rate Loans, Variable Rate Loans.

Your lawyer will conduct a full background check to ensure that it is free from debts and liens, etc. This is one of the most important tasks that he will perform. In Spain the debt is carried by the property, not the owner, so you will be liable to pay for any encumbrances discovered at the point of sale, and thereafter.

The way this research is conducted will vary depending on whether you are buying a resale or an off-plan property. A resale property is a completed property that has a previous owner and a title deed (Escritura Publica), an off-plan property is still in the process of being built by a developer and hasn’t yet been granted a title deed. Buying a resale

Your lawyer will request a copy of the Nota Simple (a summary of the title deed) from the Land Registry (Registro de la Propiedad). This document shows any charges against the property, such as unpaid mortgages, or loans, or associated taxes.

Your lawyer will also request the following documentation from the seller:

The property’s Escritura Publica
The Escritura Publica describes the property, specifies the current owner, provides information about the location and records any debts or court embargos (the Nota Simple provides up to date figures).

The receipts for annual property tax (IBI: Impuesto sobre Bienes Inmuebles)
The receipts show if the tax (IBI, equivalent to local rates) has been paid. The receipt makes reference to the Referencia Catastral and Valor Catastral (see below).

The Referencia Catastral
The Referencia Catastral details the property’s physical description and boundaries. The certificate itself comes in two parts, one being a description in words and the other a graphic representation with either a plan or aerial photo. The document also quotes the Valor Catastral, the Spanish tax office’s (Hacienda) assessed value of the property used to calculate taxes.

The receipts for community fees
This assures you that the previous owner has paid all of the maintenance fees due. If the property is part of a community you become a member and you will incur any remaining debts.

Furthermore, it may be a good idea to get your lawyer to obtain a copy of the community statutes and the minutes of recent meetings. This will give you valuable insights into how the community is run, if there are any problems with the community and what are the rules and regulations.

When your lawyer has performed the relevant checks on the above documentation he will be able to advise you properly. If charges or encumbrances are discovered, he may advise you to negotiate directly with the vendor to have them removed from the sales price, or to obtain a written undertaking that the vendor will deal with the debts or problems prior to the signing of the title deed. Either way his work will ensure that you don’t get any nasty suprises while buying or owning the property.
Buying an off-plan property

Off-plan property is in the process of being built and finished by a developer and does not have a full title deed. Your lawyer will ensure the developer’s paper work is in order by checking:

* that the building license has been issued,
* that the certificates from the Architect and the town hall have been obtained for the completion of the building (Certificado de Fin de Obra).
* the details of the insurance policy or bank guarantees to ensure they are in order (read article: Buying a Property from a Developer)
* that the property is legally registered by checking Plan Parcial (the urban plan that shows the parcelas, or building plots) at the Ayuntamiento (town hall)
* the Nota Simple is in order with the various permissions and that there are no embargos or debts on the property
* If any anomalies are discovered within the paper work, your lawyer will be able to advise you accordingly. He may discover that the problems are quite easy to solve and include the remedies as specific terms in the contract, or in extreme cases he may advise that the property is not worth the risk and that you cancel the sale.

Other services performed by your lawyer

Apart from these very important checks, your lawyer will also perform the following tasks on your behalf:

* Ensure the seller is legally entitled to sell the property,
* Advise you on the various ways you can negotiate contract terms,
* Ensure that the clauses in the purchase or reservation contract and the additional clauses you agree with the vendor are legal,
* If you are building or refurbishing a property, the lawyer will also check out the prospect of obtaining the relevant consent from the Town Hall and other associated authorities (read article: The Guide to Building your Own Property in Spain),
* Prepare a will to protect your Spanish assets (read article: The Spanish System of Inheritance Law),
* Set up an escrow account (a bonded account that only allows deposits to be collected once the contract has been completed according to the terms of the sale) to protect your deposit money,
* Contract the utilities,
* Prepare a complete list of costs for both you and the vendor to ensure that you understand your financial responsibilities. Have him send this breakdown to the vendor so that the vendor is also aware (read articles: Paying for you Property and The Spanish System of Capital Gains Tax).
* Power of Attorney

If you have a busy schedule and find it difficult to be available in Spain, the grant of ‘power of attorney’ allows you to empower a third party to do certain things (specified within the document) on your behalf. This includes the right to sign property title deeds or purchase contracts. Your lawyer is the ideal candidate for this as he or she is accountable to the Spanish equivalent of the Law Society and is under a duty to act in accordance with your instructions. The power of attorney document can be drawn up by your lawyer but must be signed by you in front of a public notary to make it legally binding.
Reserving your Property

Once the property has been checked and you are happy with the agreements, you move to the next phase of the buying process comfortable in the knowledge that future transactions should run smoothly.

6,000€ and sign a reservation contract to reserve the property for a time period of one month. Within one month you will pay 30% plus taxes (minus the 6,000€ you have already paid) of the agreed sales price and sign the purchase contract.

Once the property is finished and the terms of your purchase contract have been met by the developer, you will pay the final 70% plus taxes and sign the property’s Escritura (title deed) in front of a notary public.
Resale payment terms

To reserve the property you will sign the private purchase contract that agrees the terms and date for the completion of the sale and then pay 10% plus taxes, of the agreed sales price to the vendor’s lawyer’s escrow account.

Once the terms set in the purchase contract are met, you will be expected to pay the final 90% plus taxes and sign the property’s Escritura in front of a notary public.

The above payment structures are merely a guide, developers are commonly more flexible than this and resale scenarios are down to the negotiation between you and the vendor. For instance, a vendor may accept a reservation fee to give the buyer more time to prepare the finance required for the 10% deposit for the purchase contract.

On all reservation payments we advise you to pay directly to the vendor’s lawyer or to a bonded or escrow account that has been set up for this purpose. Always try to avoid paying the money directly to the seller.
What is a reservation contract?

The reservation contract is used as the standard format for reserving off-plan property for a specified period of time. Typically the contract describes the:

* identity of the developer,
* exact location of the property
* description and details of the property,
* property price,
* date to exchange purchase contract,
* details of developers building licence,
* details of the relevant permits, insurance and other documentation.

What is a purchase contract?

The Contracto de Compraventa is made between the purchaser and the vendor and sets out the terms under which the property will be purchased, such as:

* Agreed purchase price,
* Payment of the deposit amount,
* The exact dimensions and features of the property you are buying as demonstrated by the
referencia catastral (read article: The Importance of Using a Spanish Lawyer),
* The exact location of the property,
* The intended completion date,
* All terms and conditions negotiated between the seller and the vendor,
* A declaration that the purchaser and vendor are legally in a position to buy or sell the property respectively.

The following points are specific to a purchase contract for an off-plan property:

* Details of the planning approval,
* A specification that the developer is responsible for all debts on the property, up until the
completion date,
* Confirmation that your payments go into an escrow account to which the developer has no access until the property is finished and delivered to you,
* Confirmation that the relevant bank guarantees or insurance policies that protect your deposit are referred to in the purchase contract,
* That the costs of canceling the developers mortgage are paid by the developer,
* That all the other developer’s costs of completion are paid by the developer i.e. Plus Valia, the costs of the segregation of the land, etc
* Terms and conditions

All purchase contracts and reservation documents contain terms that set out the provisions for the sale of the property. Parties can draw up tailor-made contracts to suit their interests, inserting their own terms and conditions. These are valid and enforceable as long as:

1. They are not deemed unlawful or unfair
2. They are easily interpreted (otherwise the courts could interpret to the detriment of the party who created the clause).

If required an Arras or clause can be inserted so that if either party breaks the contract there are automatic penalties. This is usually the loss of the deposit on the purchaser’s side, and payment of double the deposit on the vendor’s side.

It would be a very good idea to have your lawyer translate your purchase contract into your language so that you have a dual copy and understand the terms and conditions described in the Spanish document.
The use of a ‘subject to’ clause

One important point to note during the reservation contract phase for an off-plan property or a purchase contract for a resale is that it is a good opportunity to include a ‘subject to’ clause(s) to prevent the loss of your deposit money should you be unable to gather your finances. Your lawyer and sales consultant will be able to advise you and negotiate on your behalf.
Buying your property

It is quite possible in Spain for a vendor and a seller to come to a quick agreement and move straight to completion and the signing of the Escritura de Compraventa (title deed of conveyance) bypassing the previous two contracts.

When both parties are ready to complete the transaction, they and their lawyers will attend the Notary’s office to sign the escritura de comparaventa (title deed of conveyance). The notary will undertake his own search of the Land Register (Registro de la Propiedad) and see if there are any undisclosed charges on the property. He will then prepare the title deed of conveyance from the information supplied by the vendor and check compliance with Spanish Law.

The notary will then read the whole document in Spanish to you and the vendor, and you will both sign the deed. The balance of the final monies owed will be settled and the notary witnesses the vendors confirmation that he has been paid.

If you are buying off/plan it would be a good idea to have your lawyer check that the developer has registered the property with the Recaudacion Provincial (for future IBI assessment) in the Land Registry and has paid the tax.

The Escritura de Compraventa is then passed to the Tax office to be assessed for duty and then to the Land Registry for entry to the property register. Your lawyer will contact you once the Escritura Publica (the registered deeds that state that you are the legal owner of the property) is ready for collection (usually 2 to 3 months).

The contract prevents the developer from selling the reserved proeprty to a third party within the specified time frame. However, should you not be able to gather your finances in time, or should you choose not to go ahead with the transaction you will only loose the reservation fee.

1. Contact a Spanish Lawyer who speaks your language, if you do not have a lawyer we will be able to supply you with the contact information for our recommended solicitor. (read article: The Importance of Using a Spanish Lawyer)
2. Talk to a financial adviser if you are planning on moving to Spain to either relocate or retire. Our team will be able to put you in touch with a recommended specialist.
3. If you think that you require finance (read article: The Mortgage Guide ) then contact our offices and we will be able to put you in touch with our mortgage broker who will give you a good idea of what you can achieve.
4. Ensure that your personal finances are in order so that you have the liquidity or access to your money should you need it in a hurry to place a deposit.
5. Contact a company that specialises in money transfers (read article: Buying Euros to Pay for Your Spanish Property).

While you are looking at property in Spain

1. Apply for your NIE number. This is your tax reference number that is required before you can become an owner by signing a title deed. Application is easy, and it only takes a few weeks to be issued. (read article: Applying for Your NIE Number)
2. Ensure that you have adequate funds available in order to place a reservation on a property when you find something you like. Often a 6,000 € reservation on your credit card(s) will be sufficient to reserve a property, while your lawyer arranges all the paperwork for the rest of the deposits. Quite often people come to the Costa del Sol and find a property that matches their criteria rather more quickly than they expected. For this reason it is a good idea to have funds available to put down a deposit and not miss out on an opportunity.
3. Open a Spanish bank account to facilitate payment of fees for the property. Our team can recommend you a bank and introduce you to the manager.

People are living much longer than they used to, meaning that increasing numbers of retirees are falling into poverty as they grow older because their pensions become eroded by inflation.

Fewer people nowadays are in receipt of a good final salary pensions in retirement and are instead having to manage on tiny pensions bought from the proceeds of money purchase pensions. Buying inflation proofing via a money purchase pension is extremely expensive, so few retirees buy this when they purchase an annuity.

The trade body, Safe Home Income Plans (SHIP) has done much to make equity release schemes more secure through its code of conduct and safeguards such as its ‘no negative guarantee’ that all SHIP members have to sign up to.

Lifetime mortgages and home reversions are both now regulated by the FSA and new drawdown products, which allow people to draw down small lumps sums in stages, have made lifetime mortgages much more flexible and attractive.

Rapidly rising house prices in the period between 1997-2007 have also made many retirees ‘property rich’ giving them much more equity in their homes to draw down than would have been possible 10 years ago.