Tancrede de Pola (OP Columnist)
FEWER homeowners are being forced out of their homes because of unpaid mortgage payments.
A combination of a growing Spanish economy, a plummeting Euribor rate and stabilising banks has led to a healthier property market for homeowners.
In fact, mortgage foreclosures are down 30% compared to last year, with just over 11,000 foreclosures served in the second quarter of the year.
Out of this figure, around 6,000 foreclosures were loans registered with individuals, while the remaining mortgages were registered with businesses.
And it is not a one off. The last quarter of last year registered a drop in foreclosures, while the first quarter of this year saw a decline of 28%.
In real terms, this means fewer families are being forced out of their homes. And it is good for both the banks and the lenders as the economy continues in a positive direction.
However, meeting mortgage payments can still be a huge burden for some.
If you’re unable to meet your mortgage payments, lenders are usually willing to reschedule your mortgage so that it extends over a longer period, thus allowing you to make lower payments.
If you are unable to make a payment you should contact your lender as soon as you have a problem.
Lenders are quick to embargo a property and could eventually repossess it and auction it within a few months, so the time to act is before you miss a payment, not after.
Changing mortgage lender or re-negotiating mortgage terms with your existing lender is OFTEN the way forward, and can be done through a broker.
Banks are required to issue a list of conditions and interest rates – that are binding – so that clients can shop around and get the best deal by comparing rates.
There are two ways of improving existing mortgage terms. The first is by ‘compulsory substitution’ where the lender offering more favourable terms/interest rates (a requirement by the Bank of Spain) takes over the existing mortgage.
However, normal costs apply including those to cancel the mortgage and take out a new one, often making this option non-viable.
Then there is by ‘variation’, where the existing lender offers a reduced interest rate or changes the repayment period. There have been instances whereby banks have been contacting clients directly and offering to move them onto a favourable fixed rate, and this has proved popular.
