Buying Property Abroad Without Taking Help From Mortgage Lenders
Property owners looking to purchase property in Spain need to know something about the different methods of payment for such purchase. For this purpose, they should do proper market research in the area. They must find out about the property prices in the area, the local tax and Excise rates. The property purchase contract usually stipulates that the buyer is required to purchase the property at its current market value or purchase property at an agreed percentage of the property’s present market price.
An owner who wishes to purchase a property in Spain has the choice between purchase property in Spain with a conventional loan from banks or purchase property in Spain with a land contract. The land contract method of purchase is usually preferred by the buyer because it is less complicated. Here, the buyer is required to pay a one-time fee as an initiation fee. The land contract also stipulates that the buyer is obliged to purchase the property for a fixed duration, say thirty years, and is not allowed to purchase more than the purchase price of the property. The land contract also usually includes certain property taxes that the buyer is liable for. These taxes vary depending on the country where the land contract is executed.
Another method of purchase property in Spain is an Option Agreement. Here, the buyer and the seller sign an agreement permitting the seller to sell the house without any kind of financial penalty after purchase. The purchase price is the entire amount payable by the buyer under the Option Agreement. In case of no purchase, the seller has no other choice but to give up the house.
Option agreements are very common in Spain, and they have attracted a lot of people who wish to purchase property in Spain without having to pay any kind of upfront fees. An Option Agreement contains all the terms and conditions of the purchase property in Spain. However, the buyer who signs an Option Agreement must not execute any purchase contract until the entire agreement is signed. The execution of the purchase contract can be done only after the expiry of the option period mentioned in the option agreement.
Mortgage Lenders in the UK
In the United Kingdom, most buyers purchase property with the assistance of a mortgage lender. Mortgage lenders in the United Kingdom offer fixed mortgage rates and a good repayment plan. Thus, mortgage loans in the United Kingdom facilitate homebuyers purchase property with a large amount of purchase money and flexible repayment options. In Spain, on the other hand, homebuyers have comparatively lesser purchase money because mortgage rates are much lower.
The purchase contract can be executed only after the expiry of the option period mentioned in the contract. Homebuyers in Spain do not have the option of buying a property using a mortgage. The purchase option depends upon the equity present in the property. Equity refers to the value that a homeowner has built-up in his or her property. In the case of bad credit, homebuyers can purchase property even with low purchase money. However, it becomes difficult for homebuyers with bad credit to purchase property using the purchase option.
The purchase option can also be exercised by a person who is not blood kin or relative of the owner of the property. Such people can purchase property without involving their parents or relatives. A purchase option can be forfeited in case of default. A land trust can act as a purchase option and allow homebuyers to purchase property without involving their relatives or blood kin.
Purchase option and purchase contracts are two different legal instruments in Spain. Both the purchase option and purchase contracts are common in Spain. Property buyers in Spain may purchase property using either purchase option or contract to purchase. The purchase contract is considered as a less legal instrument than a purchase option.