The rise in interest rates threatens to complicate the repayment of the mortgage for many Spanish families. If this is your case, do not hesitate to go to your entity to discuss the problem and find a solution, since Spanish banks are subscribed to the Code of Good Practices of the Bank of Spain, which obliges entities to protect vulnerable customers. .
In an extreme case, the bank can repossess your home and auction it off, but before that there is a long list of solutions that will help you repay the debt.
The most important thing is that you quickly contact the entity to find a way out, since if you accumulate several months of non-payments you will have less margin to solve the problem.
first measures
Once you contact the bank, they have a month to send you a plan to restructure the mortgage repayment. You can also propose an alternative yourself, which they will be obliged to study.
These are the changes that you can introduce in your loan to relieve your finances:
– No principal payment for five years: during this period, the part destined to repay the loan will be subtracted from the monthly mortgage payment. This measure is double-edged, since you will continue to pay interest during that time, but you will not return the principal.
In addition, to compensate for the part that you stop paying, you will have to increase your installments in the future, pay back what you have stopped paying or extend your loan over time to compensate for that part, so that in the long run you will pay more interest . This is a short term solution.
– During the grace period, interest is reduced to Euribor + 0.25%. That is, for a maximum of five years you will only pay interest, and these will be cheaper.
– The repayment term of the loan can be extended up to 40 years, so that the monthly installments are considerably reduced, although you will end up paying more interest, since the mortgage lengthens over time.
– If you have several loans, you can concentrate them in just one, which will reduce the interest you pay.
– In the following 10 years you will be able to repay part or all of the mortgage early without any commission.
secondary measures
Once the bank presents you with a restructuring plan, it may be insufficient and you may not be able to afford the new terms either.
If the new installment that the bank has proposed – where interest is only paid for five years – represents more than 50% of the household income, you can request a partial removal of the mortgage. That is, they reduce the part of the loan that you have left to pay. You can ask for this help even if there is already an open process for repossession of the house.
The removal can be:
– Remove 25% of the debt
– Subtract equivalent to the difference between the amortized capital and the one that saves with the total capital lent the same proportion as the number of installments paid by the debtor over the total owed.
– Subtract equivalent to half of the difference between the current value of the home and the value resulting from subtracting twice the difference with the loan granted from the initial appraisal value, provided that the first is less than the second.
final measure
If, after the previous changes, you are still unable to pay the mortgage, in a period of 12 months it will go through a dation-in-payment process, as long as an auction of the house has not been announced by the bank.
If the auction has already started, the bank will sell the house and if it makes a profit less than the mortgage debt, you will still have to pay the bank the difference.
The dation in payment consists of the fact that the bank keeps the house and the debt is canceled, regardless of what the entity gets by selling the house. Dation in payment has these conditions:
– It supposes the total cancellation of the debt. You will no longer have any more obligations with the bank, nor will your guarantors.
– At the time of the dation you can ask to stay in the rental house for two years, paying each year the equivalent of 3% of the debt that you have left to repay. If you fail to pay again, you will be charged 10% interest as a late fee.
– When the bank takes the house and tries to sell it, you can negotiate to keep a part of the profits if they exceed the debt you had with the entity if you help them find a buyer.
Can I take advantage of these measures?
In order to demonstrate the vulnerability of a home and be able to start the mortgage restructuring process, all of the following assumptions must be met:
– The joint income of the members of the family unit cannot exceed three times the IPREM (Public Indicator of Multiple Effects Income), that is, 1,694.70 euros. If one of the members has a disability or is dependent, the limit amounts to four times the PREM (2,259.60 euros).
-The mortgage payment exceeds 50% of the net income of all the members of the family unit. If one of the members has a disability or is dependent, it is enough that the mortgage exceeds 40% of the income.
– That, in the four years prior to the time of the application, the family unit has suffered a significant change in its economic circumstances -the mortgage burden on the family income has multiplied by at least 1.5- or the number of of relatives following the following criteria: a large family has been formed, a single-parent family, a member has suffered gender violence, a disability greater than 33% is detected
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