Spanish Financial Terms translated

Carga

Encumbrance or Registered Charge.

Legal charges entered in the Land Register. Before signing the purchase contract, ensure that there’s no encumbrance related to that property in the Land Register.

Cedula de habitabilidad

Occupancy Certificate.

This document certifies that the home meets minimum occupancy conditions. You will need to produce this document when contracting utilities such as water, electricity and gas.

Comision de apertura

Opening Fee or Loan Arrangement Fee.

A percentage paid for granting and processing the mortgage.

Comision de cancelacion anticipada

Early Repayment Fee.

This fee compensates the lender for the loss of interest payments expected for the period between the early redemption and the agreed maturity of the loan.

Escritura publica de compraventa

Deed of Sale.

This document legalises the purchase and shall be signed by both contracting parties and by the notary.

EURIBOR

European Inter-Bank Offered Rate, index based on the interest rate for deposits in Euros at 12 months that is published by the European Central Bank.

Gestoria

Solicitor.

Hipoteca

Mortgage.

Impuesto actos juridicos documentados AJD

Transfer Tax.

A tax payable on sales transactions subject to VAT and mortgage loans, at a rate of 0.5%.

Impuesto sobre el valor anadido, IVA

Value Added Tax, VAT.

Newly built homes are subject to VAT. The rate is 7% - in some regions like the Canary Islands the rate may vary.

Impuesto sobre transmisiones patrimoniales, ITP.

Capital Transfer Tax

This tax is payable instead of the VAT when the property is now newly built. In this case, generally the standard rate is 7% and is independent of the assigned property. NOTE there are regional differences as an IVA payment above.

IRPH

Indice de Referencia de Prestamos Hipotecarios = similar to the EURIBOR, but is published by the Banco de Espana.

Notario

Notary.

The Notary acts as the public official when signing the public deeds, such as the sales or mortgage loan agreement. He is obliged to ensure that the current legislation is fulfilled and to defend the interests of the parties, particularly the borrower’s interests.

Plazo de amortizacion

Term or Repayment Period for the Mortgage.

Prestamo hipotecario

Mortgage Loan.

Usually known simply as Hipoteca (mortgage).

Registro de la propiedad

Land Register and Land Registry.

The land Register contains contracts or legal charges referring to a property, such as ownership or encumbrances.

Subrogacion

Remortgaging with another lender.

If you have already a mortgage, but another lender offers you better terms and conditions for your mortgage, you can remortgage, ie transfer the mortgage and all the corresponding rights to this new lender. This transaction is tax-free. NB you can not raise move money or change the term.

Tasa annual equivalente TAE

Annual Percentage Rate, APR.

This represents the effective cost of a loan calculated as if it were paid as one single repayment each year.

Tasacion

Valuation.

An independent surveyor company carries out the valuation of the property in order to determine the current value of the home within the property market and to specify the maximum amount that can be financed. The valuation is valid for six months after the date of issue.

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