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Can a Mortgaged House Be Sold in Spain?

Can a Mortgaged House Be Sold in Spain - Can a Mortgaged House Be Sold in Spain?

Knowing if it's possible to sell a mortgaged house is a common question among homeowners. Firstly, we confirm that, in Spain, it is doable and not too complicated, and there are several ways to achieve it.

We must consider that most mortgages last a minimum of 20 years. Therefore, it is usual to purchase and sell mortgaged properties. Sometimes, it is even easier to sell a home with a mortgage since buyers see it as an opportunity to buy at a lower price.

What options are there to sell a mortgaged house?

In Spain, there are three ways. Choosing one or the other will depend on the mortgage pending by the sale date, the profit expected from the property sale and personal circumstances. Take note of the options:

Cancelling the mortgage thanks to the sale

When the amount we get from the sale is higher than the loan we owe, this is usually the preferred option. To do this, we must request a certificate of outstanding debt we'll deliver to the buyer.

Upon signing the deed, the bank receives a check to settle the debt, and the seller gets the rest of the amount agreed. That will be considered capital gain and is subject to taxes.

If we don't get enough to redeem the mortgage, the usual is to pay off the mortgage as much as possible and finance the rest with a personal loan. That is to say, the seller pays part of the mortgage debt and formalizes a new loan for the outstanding capital.

Transfer the mortgage to the buyer

Another option would be changing the ownership of the mortgage loan. That way, the buyer saves the opening commission costs and the seller the cancellation fees. In addition, it won't be necessary to pay the Tax on Documented Legal Acts.

However, there are also disadvantages. On the one hand, subrogation depends on the bank considering the buyer's risk profile suitable. On the other hand, the buyer cannot negotiate the conditions of the loan. Therefore, it is not always an attractive alternative to sell the property.

Bridging mortgage

The third possibility to sell a mortgaged house in Spain has particular characteristics. It is interesting when we need to buy a home with some urgency, and we have not been able to sell the one we already have a mortgage on.

If we need to buy a property while selling another, the bank grants a loan to purchase the new home by adding the amount owed to the old one. That is, two mortgages get combined into one. The fee will be higher but lower than what it means to have two loans.

However, the bank requires some conditions and set a deadline to sell the property. When we have sold our property, the bridging mortgage gets settled, and we start to pay the second mortgage. The advantage of this choice is its flexibility. However, in the event of non-payment, the bank assumes both properties as collateral.

Do you want to sell your home? Mortgaged or not, Spainhouses.net helps you achieve it. It's as simple as posting your ad for free. Or, if you prefer, we put you in contact with the best professionals in the area. It's up to you.

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