What should I do if I can’t pay my mortgage?

Mortgage payments take precedence over other debts.

Out-of-court mortgage foreclosures mean that the institution can auction a mortgaged property with the involvement of a notary public through an extrajudicial process.

If the full amount of the debt is not covered with the sale of the property, the bank can try to collect the debt with all of the assets of the individuals who are party to the mortgage, be they borrowers or guarantors. In any event, this possibility must be agreed in the mortgage contract.

However, if you are unable to meet payments, and your household unit is included within the “exclusion threshold” envisaged by Real Decreto-ley 6/2012 (in Spanish)Abre en ventana nueva, you may request several measures aimed at making it easier for you to meet your obligations. These include, among others, a deed in lieu of foreclosure, which consists in transferring title to your main residence to the institution to settle the debt in full.

However, even if the regulations targeting the most vulnerable mortgage debtors do not apply, you can negotiate better mortgage conditions with credit institutions at any time during the loan term.

More inforamtion in our Mortgagors experiencing financial hardship Abre en ventana nuevasection.

 

 

 

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