Types Of Mortgages Spain

2007-03-08 10:33:40

( Financial )



Obtaining Spanish mortgages is one way to buy any kind of property in Spain. For as long as you provide complete documentation to the local Spanish bank, and the bank sees that you qualify for mortgages Spain, you are free to choose from various types of Spanish mortgages available.

There are mortgages Spain for individuals for first time applicants, and there are Spanish mortgages for people who have existing mortgages, and wish to reapply for another mortgage, in order to take advantage of a lower interest rate.

One type of mortgage in Spain is based on interest rates that are charged daily, weekly, quarterly or monthly, with repayments made within a specified period. You should compute the APR of each mortgage loan proposal, in order to find out which mortgage loan provides the best interest rate. The computation of APR should not be used as a means of comparing mortgages Spain when applying for an interest-only mortgage.

An interest-only mortgage is another type of mortgage that is available in Spain. This involves the payment of the equivalent amount of interest for a certain number of years, after which the principal amount must be settled through a pension plan, endowment policy or by setting aside a certain amount of money in a savings account. The principal amount must be raised through any of these methods, and be settled in full by the time the borrower reaches a certain age. Should the borrower fail to raise the principal amount by this time, the bank will have the right to repossess the piece of property that was purchased by the borrower.

Individuals who wish to take advantage of a lower interest rate can apply for a remortgage in Spain through a number of lending companies. You can make use of the equity of your home to fund the down payment of your remortgage. The amount that is granted for a remortgage loan will depend on the financial institution.

Two types of remortgages Spain are available. A standard remortgage plan allows the borrower to pay for the interest and principal equally in monthly installments. The second type of remortgage scheme requires you to pay for higher interest rates during the early stages of the repayment period. The interest rate becomes lower as you continue to pay for the principal amount of your loan.


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