CONSTRUCTION MORTGAGE SPAIN

This product is exclusively for construction by individual clients who already own the land including a ready project with licence to build (licencia de obra). Amount: Maximum financing 70% of the estimated end value of the property.

Interest Rates: Euribor + 0,75% (with life insurance or 0,85% without life insurance). Opening Fee 1,35%. Partial redemption 0%, full redemption 1%.

Example

There are 2 values : Actual Value (AV) and Final Value (FV)
For the example the FV is 1.000.000€ and the AV is 300.000€

We give maximum 70% of the FV (this is established by the valuer who estimates the final value upon completion of the build) In our case 1.000.000€

In this case we would give maximum 700.000€. How do we advance the amount? :

The first draw down is 50% of AV (This is the value of the plot, which has to be free of charges including the project). In example 50% of 300.000 = 150.000€

The last draw down is 20% of FV ( and only after the you present certificate of finalization of construction - final de obra and licence of First Occupation) In our example 20% of 1.000.000€ = 200.000€

The difference between the first and the last advance 150.000€ - 200.000€ is 350.000€. This amount will be given upon receipt of certificate issued by the architect in which he confirms that a certain amount has been built and the previous advance has been used for the purpose of the build.

To further clarify, the first advance is given at the notary in the amount of 150.000€. When this amount has been used, and the architect presents us with a certificate confirming that for example 130.000€ have been used out of the 150,000€ for the construction, we will further advance 80% of 130.000€ = 104.000€ (and so on until the 350.000€ is used up)

Construction Insurance is compulsary during the build period to protect the constructor unless this insurance is in place by the constructor.

The Ten Year Insurance Plan (similar to the 10 year NHBC in the UK) is NOT compulsary by the bank.