December 28, 2009 at 11:50 am #55353
Hi Everyone – it has been a long time since I posted on here but recently come across something which I thought may be of assistance to most people with a Spanish mortgage and who are experiencing difficulties. The following are based on mine and my family and friends personal experiences
Spanish banks will help you if you are in a sticky situation. This was something that I found out nearly the hard way. My bank called to say that I hadn’t paid my mortgage for three months (this was their error as I had an insurance to cover mortgage payments)
However when they told me that they weren’t willing to do anything I went to see the manager and passed my keys over to him and told him “This key iis for the front door, this one for the upper door, and here is the key to my car”.
Strangely from not being able to help he was very forthcoming with a solution that worked well for me. it is costly but based on potential future contracts this is something i can live with
The solution for me was that they provided me with a loan for two years that covered my mortgage payments and the loan payments during that period. As I say it is not a cheap solution and should only be considered if you know you are going to be earning again in the next two years, but it gives you a breathing space.
Next my sister went to the bank (same bank – Banco Popular) with me and asked for similar. They told her no but they were willing to give her an interest only mortgage for two years (subsequently they have offered her something else as well – read on below)
Thirdly a Spanish friend of mine told me that all banks are required (by law I believe) to offer customers assistance. If you have been paying your mortgage for 4 years at least you can re borrow the money you have paid off within the terms of your mortgage. So for example, if you took on an initial loan of say €200,000 and after 5 years of paying had reduced this to €160,000 – the bank can lend you back the €40,000 you have paid off. What this then does is extend your mortgage by a further five years, but gives you capital if required (if you are a business owner for example struggling and needing a cash injection it is a perfect solution)
After finding this out my sister went back to the bank who said they could not do this for her because she had only had her mortgage two months (the interest only was classed as a new mortgage not a continuation) but they would be willing to loan her a few thousand to tide her over while her business kicks off.
The point of all this is that the banks will help you, but they will not make it easy for you (don’t know why but there you go) – you just need to ask them and ask them insistently
Good luck to everyone and I hope that 2010 is much better than 2009
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