The mortgage, also called mortgage is the amount of money granted to a person, whether natural or legal, for the purchase of a home or other property. All the conditions and guidelines of the mortgage reflected in a contract signed before a notary, called writing.

The release of the mortgage must occur within a previously established. Payments are made through assessments that generally are monthly. They consist of two parts: one for interest and other capital.

During the life of the mortgage debtor listed as owner of the building, although the financial institution maintains a reserve domain can be exercised in the event of default.

History mortgages

The term mortgage was used in ancient Greece but acquired its current meaning in Rome, where he called garment and constituted a guarantee of payment on the purchase of land.

In the Middle Ages European mortgage payments served as feudal. Farmers demanded money from the feudal lords to buy land mortgaging the ground. The payment could be done with the harvest, with money or with animals.

Types of mortgages

At the time of taking out a mortgage must take into account the interest rate. That being the percentage applied to the amount that comes from the mortgage and that is paid to the financial institution. The main types of mortgages are:

·  Interest rate fixed: are those in which the interest rate does not change during the entire period in which the mortgage is paid.

·  Interest rate varies: are those in which the interest rate changes during the life of the mortgage on the basis of a reference rate, usually reviewed every year. The most widely used index is Euribor.

·  Mixed Interest rate: are those who negotiates with the financial institution a term fixed rate and the other, usually longer than the previous variable rate.

APR

To compare mortgages, on many occasions, used the Annual Equivalent Rate (APR). It is the total interest that joins the capital of a mortgage loan.

It is calculated based on a mathematical formula that includes the nominal interest rate, bank fees and the term of the mortgage.

Costs of a mortgage

The hiring of a mortgage creates a series of added costs. They are, for example, the Property Registry, valuation, agency and the minutes of a notary.

In addition, there are some that need to pay taxes when a property is acquired:

·  Inheritance Tax (ITP) is applied to the second-hand properties and accounts for 6% or 7%, depending on the Autonomous Community. The Value Added Tax (VAT) applies to new buildings and up to 7%. Depending on whether the home is purchased new or used will be necessary to pay the VAT or ITP.

·  The tax documented legal (IAJD): varies according to the Autonomous Region in which the operation is performed.

Remarks

All expenses arising from an operation sale deduct in the statement of income except for those who are extraordinary as insurance or real estate.

The mortgage interest rate variable referenced to Euríbor being the most popular in Spain in recent years.