Is it mandatory to take out a home insurance when I ask for a mortgage?

Published on June 26th 2018

As a general rule, the regulations regarding the mortgage market indicate that it is not mandatory to take out home insurance when subscribing a loan

Is it mandatory to take out a home insurance when I ask for a mortgage?

Those people who have a mortgage or are going to acquire a house through this formula should know that, as a general rule, the regulations regarding the mortgage market indicate that it is not compulsory to take out home insurance when subscribing a loan with a mortgage guarantee. It is important that we take it into account because, although the bank offers it, we must know that there is the option of not having access to the insurance contract. Something different is the obligation that we acquire insurance to protect against fires.

In reference to this, the reform of the law of the mortgage market requires that there is insurance covering the damages that may be caused in the real estate, taking into account that the value of the appraisal and the sum insured must coincide, excluding the value of the goods that are not insurable by nature. This obligation is applicable to mortgage securities issued in accordance with the regulations of the mortgage market. So the fire insurance is mandatory for those mortgages whose owner is the bank.

A person of British nationality is interested in buying my house on the beach. Should I do something special when dealing with a sale to a foreigner?

As in any sale, and more in those operations that come out of what we would consider usual, it is important to be advised by a professional. At present there are numerous real estate agencies specialized in offering national product to foreign clients. These professionals not only skip the possible language barrier, but they know all the cases that will make the purchase process reliable and simple for both us and the buyer.

In the case that you choose to manage the purchase of your own apartment from a foreigner, there are some aspects to take into account, above all, of a legal nature. For example, regarding the form of payment, although the Spanish legal system offers many guarantees, we must leave everything very well defined and we must not rule out the help of a lawyer, since foreign buyers usually have support of that type.

In any case, usually there are no problems in payments, since the foreign buyer is typically a solvent customer and good payer, and usually make the payment in cash without resorting to a mortgage. In many cases we are talking about purchases that are aimed at investment, and if they need credit, they usually go to banks in their country of origin.

As for taxes, taxation is exactly the same being 10% in new construction and a percentage determined by each community for second hand. Later, if the buyer is not a resident, he will have to pay the tax of non-residents, and the equity tax if applicable. On the other hand, everything that is IBI, garbage tax ... In short, any local tax would be exactly the same. Selling a flat to a foreigner is not far from doing it to a Spaniard, although surely being advised by a professional means tranquility, not only to us but also to the buyer.

 

Source: ABC