Friday, December 29, 2023, 10:17
-
Copy link
-
WhatsApp
-
Facebook
-
X
-
LinkedIn
-
Telegram
Interest rates, terms, bonuses, insurance… when you take out a mortgage you have to attend to very relevant issues that mark the life and conditions of this bank loan.
This often means that clients’ attention focuses on the aforementioned aspects, forgetting (or not knowing) the steps to follow when the long-awaited moment arrives to pay the last installment. However, it must be taken into account that, despite having completed the payment, the home is not yet completely free of charges and it is advisable to carry out some procedures to leave everything resolved and avoid problems in the future.
The key is to cancel the mortgage registry so that it is recorded as free of charges. This means recording in the Property Registry that the contractual activity has ended so that it is recorded in the official records.
Why is it advisable to carry out this non-mandatory process? Mainly to modify the legal situation in order to carry out any procedure, such as the sale or even the remortgage of the same, for which the buyer or the bank will request the cancellation document issued by the registry.
The process is simple, and there are three ways to carry it out. The first one do it yourself. To do this, you must request a zero debt certificate from the bank, go to the notary to request the public deed of cancellation, settle the Documented Legal Acts Tax at the Tax Agency office of the autonomous community and deliver all the documentation to the Registry. of the property. It is a somewhat heavy administrative and bureaucratic process, but it is not very complicated and only requires patience and perseverance.
Another option is to entrust it to an agency that presents all the information and carries out the process, obviously with a management cost for the work.
In addition to this, it is possible to entrust it to the bank, the most common option. To do this, you just have to go to the financial institution and formally communicate that you want to start this procedure. Once the process is completed, the loan cancellation deed will be received and the property will be free of that mortgage. It must be taken into account that some entities only offer the option of processing the procedures before a notary, so in those cases the client must present the documentation at the Registry.
Likewise, regardless of the route chosen, the user must assume the cost of the notarial deed and registration fees.
Freepik
Amortizations, an option to consider
In addition to its contractual end after having paid all the installments, the mortgage can be canceled by opting for amortization. In these cases, some factors must also be assessed, which fundamentally involve comparing the profitability of the accumulated savings to raise the mortgage and its cost. This extra money in the checking account usually does not provide benefits to users, however with amortization costs in the form of interest on the debt are avoided.
However, if this savings is found in an investment, as is the case with funds, it is essential to compare the expected profitability of said products.
Likewise, although amortization fees have been greatly reduced since 2019, the characteristics of the mortgage must be taken into account (whether it is fixed, variable or mixed) to know if it compensates the payment for debt settlement.
Ultimately, we must value the emotional benefits that may feel like the release of a burden, but that may also involve the loss of savings, leaving the client in a compromised situation in the event of any unexpected need or expense that may arise.
Another option to consider is partial amortization, thanks to which it is possible to reduce the terms, that is, advancing money from the installments to reduce their number. There is also the option of reducing the installment so that, even if it is completed on the scheduled date, the amount to be paid will be lower due to advance payments.
Regarding the best time to make the amortization, it depends on the financial system to which the mortgage is covered.
In the French system, the usual one in Spain, more interest is paid on the first installments than capital repayment or amortization. As time progresses, the portion allocated to interest is reduced and the amount of repayment of the loan itself increases. Therefore, amortizing at the beginning considerably reduces interest. In any case, to evaluate all these options, the advice and support provided by the bank is essential.
Report a bug
2023-12-29 09:24:35
#Ive #finished #paying #mortgage
