Who should pay the expenses of a mortgage?
March 21st, 2022 |
When we carry out a purchase or sale of a property, there are several expenses that we must take into account. If the buyer needs to go to the bank and apply for a mortgage, there are a series of expenses to face and we have to be clear about who they correspond to pay the expenses of a mortgage.
The rule that regulates mortgages in 2022 is the one that has been in force since 2019. This New Mortgage Law is the one that indicates the distribution of expenses when formalizing a mortgage. We are going to review it carefully to see what expenses correspond to the buyer and what expenses correspond to the seller.
It is always a good idea to have someone to help you and advise you when it comes to taking out the expenses of a mortgage. At Homewatch we put at your disposal the best professionals so that they can tell you how you can obtain the greatest benefit and the best possible conditions. Do not hesitate and contact us now to advise you on the expenses of the mortgage.
What expenses does the buyer pay?
The buyer is the one who requests the mortgage, and therefore must be in charge of paying some expenses related to it. Let’s see what those expenses of a mortgage are that you must take care of.
The appraisal of the home is one of the expenses that is borne by the buyer of the property. Through this report we can know what the estimated price of a home is at a given time. Although due to the fluctuation of the real estate market this price usually varies over time, so it is important to take advantage of the home appraisal and ask for the mortgage if it suits us.
Another charge that the buyer must take care of is that of the economic amount that his copy of the deed supposes. When going through the notary, each party that is involved in the mortgage must take care of the money that their copy of the deed costs.
The buyer can take care of other expenses, but these are not essential for the mortgage. Some of these expenses of a mortgage are those of opening commission, home insurance or payment protection insurance. As we say, these expenses are not essential and depend on the package that the buyer requests from the bank.
What expenses does the bank pay?
The bank is the other party interested in the mortgage. It is important to choose the bank and the mortgage that it offers us well. If you want to know if you are choosing your mortgage well be sure to consult our expert advisers.
Notarial expenses are borne by the bank that issues the mortgage, both in the mortgage deed and in the purchase and sale deed. The cost of this charge is determined by tariffs and is regulated by law.
The expenses derived from the work that the agency has to carry out, such as the registration of the mortgage, those related to the management of the purchase and sale, the settlement of taxes, etc. All these administrative expenses will be borne by the bank.
The bank will also bear the costs of registering the property, which are again regulated by a series of fees.
The Tax on Documented Legal Acts is another expense that must be borne by the bank that grants the mortgage to the buyer of the house. The amount of this tax depends on the autonomous community where the property is located.
The banking entity must also be in charge of the registry verification or simple note. This document serves to know the loads that the property has and also to confirm who is the owner. It is a very small expense, but the bank is also in charge of it.
What are the changes in the cost of a mortgage in 2022?
As we can see, the buyer no longer pays all the related expenses of a mortgage, as if he did before the reform of the mortgage law of 2019. This change has meant that the bank bears many of the expenses.
It was also established that those who had signed the mortgage before the entry into force of the New Mortgage Law, on June 16, 2019, can claim the refund of the constitution expenses.
This means that the buyer who had a mortgage signed in advance of the law, can claim from then on 50% of the notary expenses, 100% of the agency expenses and 100% of the expenses related to the registration of the property.
How much is paid to cancel a mortgage?
If you wanted to cancel the mortgage and leave your property ready, free of charges, perhaps to sell it or perhaps to have finished paying the monthly installments of the mortgage amount, you must carry out some procedures that, of course, cost money.
In the first place, the necessary expenses for the cancellation of the mortgage include those that have to do with the notary’s office. The notary must make a new cancellation deed to finalize the mortgage. This expense is regulated by law, the average price is usually around 400-500 euros.
Other unavoidable expenses, which we will have to face at the time of canceling the mortgage, are the registration expenses. The registrant is in charge of eliminating the mortgage charges and must charge for their service. In this case, the average price of management is usually between 200 and 300 euros.
Finally, we have the agency expenses, these may not be needed if we are able to carry out the procedures ourselves, or someone we know who understands, and we do not need to hire an agency. In case of doing so, the agency will charge us on average around 300 euros for the procedures.
These are the expenses that need to be covered to obtain the cancellation of the mortgage once the monthly installments of the loan that covered it have been paid or when selling the house, which we must deprive of the charges that are recorded.
As you can see, thanks to the New Mortgage Law of 2019, things have changed a lot and the bank is responsible for a large part of the expenses of a motgage, relieving the buyer of the charges related to the start of the mortgage. Get advice from professionals and look for the best mortgage with which you can get the home of your dreams.
Article by Vanesa Mena, Mar 21, 2022