Paying Off Mortgage — Anything to Worry About?

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This topic contains 6 replies, has 4 voices, and was last updated by Profile photo of Anonymous Anonymous 7 years, 9 months ago.

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  • #54816
    Profile photo of Anonymous
    Anonymous
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    Our mortgage rate reset back in November to 7%, just before the Libor crashed to new lows. This, coupled with a much stronger $/Euro exchange rate has put us on the path to paying off the mortgage on our townhouse in Menorca.

    So far, we have been able to squeeze the following information out of Banco Santander: (1) they will charge a 1% early payment fee, and (2) they will charge a 0.55% fee just to deposit our Euro-denominated check into our bank account (!). From experience, there will undoubtedly be other commissiones…

    Question: (1) do we need a lawyer this time, or will Santander simply payoff the mortgage and release our deed? (2) is it as arduous process to payoff as it is to purchase? (3) any hidden costs?

    Any experiences would be greatly appreciated!

  • #90733
    Profile photo of Anonymous
    Anonymous
    Participant

    Can you not use a currency transfer company to transfer the funds to your bank instead of paying in a cheque? They usually have agreements with the banks so that you avoid the fees for paying in money.
    Not sure how feasible this is from the USA but would be worth investigation to save you quite a bit of money.

  • #90734
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Carey,
    Sadly this is how Spanish banks works. Your rate set up on the anniversary becomes such a lottery. This interest setting along with the strong €, is creating so much problems for the borrowers and the banks have not been receptive.

    The Spanish Banks like all things in Spain do not believing in reacting to the market or the needs of the people, even if this means that property has to be handed back over to them.

    I do agree with hilly billy to use fx brokers. I have used HIFX, & Baydon Hill in UK.

    I will not use a lawyer if I was you. What I certainly will do after a while once the mortgage is paid off is check with the land/property registry to check that the banks charge/embargo has been taken off. Banks in the past did not bother in doing so, as they say this as a waste of time & effort.

    Finally. I do not know the $/€ rates, but perhaps whist the € is strong you pay a part of the mortgage. The fact is that in the present climate you have a credit with the Spanish bank & don’t exhaust it. These days excess to credit is a far bigger issue in the overall scheme of things.

  • #90739
    Profile photo of Anonymous
    Anonymous
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    @hillybilly wrote:

    Can you not use a currency transfer company to transfer the funds to your bank instead of paying in a cheque? They usually have agreements with the banks so that you avoid the fees for paying in money.
    Not sure how feasible this is from the USA but would be worth investigation to save you quite a bit of money.

    We tried that, using http://www.xe.com which has the best rates in the US, and it took Santander forever to find the wire (in Madrid) and even then they applied a hefty fee for processing the wired funds, which were also in Euros. They are one of the few banks that are still in good shape — for a reason.

  • #90740
    Profile photo of Anonymous
    Anonymous
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    @shakeel wrote:

    …after a while once the mortgage is paid off is check with the land/property registry to check that the banks charge/embargo has been taken off.

    Thank you. That is exactly the kind of thing I would not have thought of.

    The $/€ exhange rate is much better for $ holders than it has been in the recent past, so to avoid currency fluctuations causing more sleepless nights, and to simplify our lives we will pay off as soon as possible. It will also make things easier for our daughter to manage should a disaster befall us.

    It is only a guess, but I have a gut feeling that the EU will recover more quickly from the current mess, because the EU financial system was not as unregulated as in the US (well, maybe with the exception of the UK). I expect the € to rise against the dollar in the next year.

  • #90742
    Profile photo of katy
    katy
    Spectator

    Paying off the mortgage needs to be done legally, document drawn up (like an escritura) and notarised, plus some fees such as property register etc.My Daughter paid hers. I think the costs were about 340E. She used a Lawyer so total costs were cerca 800.

  • #90761
    Profile photo of Anonymous
    Anonymous
    Participant

    Yes, Katy, all this can be done by the borrower at the notary or a gestor representing you.

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