How a real mortgage works

How a real mortgage works

A mortgage loan consists of receiving a certain amount of money -capital- from a bank in exchange for the commitment to return said amount, plus the corresponding interest -based on the interest rate-, through the periodic payment of quotas that They are usually monthly. As a guarantee of payment, the property acquired is also offered. This is the definition of mortgage loan offered by the Bank of Spain and contains the three key elements to understand how a mortgage works: capital, interest and amortization period.
Key 1: the capital
It is the amount of money that we request from our bank when buying or renovating a home. As a general rule, the bank finances up to 80% of the appraisal value of the property if it is the first home and around 70% if it is the second. What happens to the remaining 20%? The customer must deliver it as a first payment or "entry" at the time of purchase of the home. This is so for two main reasons: on the one hand, that the client has 20% of the value of the property in advance demonstrates its ability to save, something that banks value; On the other hand, by financing up to 80% of the property, the bank does not assume all the risk of the operation in case of default by the buyer.
For example, if the home we want to buy costs € 100,000, the most usual thing is for the bank to finance us up to € 80,000. However, it should be noted that there are also mortgages at 100% financing of the value of the property. The banking entities offer them to those clients who demonstrate a very important solvency and economic stability, for which the risk of default that the bank runs is much lower. In this regard, owning a second home or the solvency of the guarantors supporting our request are important points when granting this type of financing.
The appraisal of the property can also be another way to access a mortgage loan at 100%. If, after assessing the property that we want to acquire, it turns out that its value is higher than the market price, the bank could facilitate its full financing.
Another additional way to get 100% financing is to acquire a home that the bank already has within its offer.

Key 2: interest
The interest is the economic benefit that the bank obtains by granting the client access to the requested financing. In the case of variable rate mortgages, it is composed of two parts: the reference index and the differential. The sum of the two offers us the time of interest we will pay for our mortgage.
- The reference indices. These indices are used to modify the interest rate of the variable rate mortgage loan, that is, they indicate how the price of money evolves and this affects the total amount that the client will have to repay in the monthly installments and, therefore, It influences the total to be repaid at the end of the life of the loan.
In Spain, the most commonly used reference index is the Euribor, which shows the price at which European banks lend money to each other. Its revision is usually annual, although it can also be done quarterly or semester. After this revision, the monthly fee to pay for the client can go up or down, depending on the evolution of the Euribor.
In addition, there are other reference indices, among which the Entity Set Index stands out.
- The applied differential. This is what the bank charges for assuming the risk of financing the purchase of a property.
With these factors in hand we can differentiate three types of mortgages depending on the interest rate that apply:
- Fixed rate: In order to calculate the cost of fixed rate mortgage loans, the Euribor is not taken into account, only the fixed interest rate applied by the bank, so you always know exactly the monthly payment that will be paid.
- Variable rate: In the case of variable rate mortgages, the most common is to have the Euribor as the reference index, which varies daily, although the most common is that the interest rate on the loan is updated every 6 months. the value of the Euribor at that time. In this way, the reference index determines the cost of the mortgage loan: the lower the Euribor, the lower the monthly mortgage payment for the client.
- Mixed rate: These mortgages apply a fixed rate during the first years of the loan, and then proceed to apply a variable interest with reference in the Euribor.
Two other important concepts that make reference to the price of a mortgage loan are the TIN and the TAE:
- The TIN is the acronym of Nominal Interest Rate: it is the price that the bank charges for lending money during a certain period of time. This figure does not take into account any additional expenses associated with the mortgage contract, such as an opening commission. It serves as an indicator of the price of that product or financial operation within the same bank, so it does not serve to compare product prices neither in the entity in which we request the loan nor among other entities.

The APR is the acronym of the Annual Equivalent Rate: it indicates the effective cost of a loan during a given period according to a standardized mathematical formula used by all banking entities, that is, it allows comparing the cost of the same product among banks. The TAE does include the cost of commissions and some expenses associated with the loan.
When a bank offers a variable rate mortgage loan it is usual to see its cost expressed in three different ways: through the TIN, the Variable APR and the applied Euribor + differential formula.
At BBVA we have mortgages that adapt to you. Discover them now by clicking here.
Key 3: the amortization period
It is the time that we are going to take to return the capital that they have lent us plus interest. The most common in Spain is to find mortgages that offer a repayment period of 20 to 30 years, although there are also from 5 years and up to 40.
During this amortization period we will face a series of monthly installments whose amount will depend both on the time we have to repay the loan and the capital they have lent us and the interest that we have to pay. The longer the refund, the lower the fees, but the higher the interest we will pay at the end of the life of the mortgage, and vice versa.
Summing up, the monthly payment will be the sum of the interest plus the capital, but its composition, what is paid at each moment, will vary throughout the life of the variable mortgage, being the same in each installment of the mortgage at fixed.
The most common way to calculate what is paid in each installment is to use the so-called 'French method', by which at the beginning of the life of a mortgage loan the principal interest is amortized and, in a lower percentage, the capital. As time goes by, this proportion will be invested and, in the last installments, capital will be paid mostly.

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How a mortgage loan works

How a mortgage loan works

When deciding to buy a house or apartment, many people wonder how a mortgage works, what steps are necessary to formalize it and to choose the best option, because this is the financial tool that most people use to form heritage.

The conditions of the mortgages are negotiable and nothing prevents asking for offers in several financial institutions to choose the best one. It is a mistake to keep the mortgage offered by our regular bank without consulting other offers. It is essential to compare mortgages and seek the best possible conditions, as this can represent a good saving of money or acquire a better property.

It must be borne in mind that the mortgage loan also includes other important expenses, such as the fees charged by the financial institution, insurance and notary expenses.

The basic questions are: the interest rate that will be applied, the term, the commissions and the possible penalties.

What is a mortgage

Also known as mortgage credit; It is a loan that makes you a financial institution, with a cost (interest) and a certain term. Monthly during that period, established in a contract, you must pay the agreed amount.

The property you are buying is "mortgaged", that is, as a guarantee that you will comply with your payment in a timely manner, hence the importance of requesting a credit appropriate to your profile, that does not put your finances and assets at risk. your family.

At the end of the payment of your credit, the freedom of lien is processed, a document that confirms that you do not owe any bank to Sofol, that the house is no longer mortgaged and that it is yours.

Mortgage loans can be used for different purposes related to real estate, such as the purchase of a new or used house, department, land, construction, remodeling, extension or completion of work.

How to process

Go to request it with a mortgage professional or the branch of the bank or Sofol you prefer. This first approach should serve to clear up doubts about the process of granting credit, know the detail of the mortgage product you chose and corroborate that it is the one that suits you best.

In general, if you meet all the requirements, it can take between 4 and 5 weeks for the signature of your credit and purchase before the Notary Public.

Rights and obligations

When you acquire a mortgage, you sign a mortgage opening credit agreement, where the rights and obligations for both parties are established.

You, agree to pay an agreed amount monthly, within the established time and place.

For its part, the bank or Sofol assumes the commitment to respect the terms and conditions of the loan set out in the contract.

Remember that your property remains as collateral for the loan, therefore the institution has the right to claim the property if you do not pay as agreed.

What happens if you stop paying

The general policy of institutions in the area of ​​delinquency works like this:

As of the first month of arrears, in addition to the own interests of the credit, moratoria interests are generated, that are between 1.5 and 2 times greater than those of your credit.

If the breach of the monthly installments passes the three months, most of the institutions freeze the interest rate, in the case of a credit with decreasing rate, and you continue accumulating late interest.

Beyond three months, it is likely that an adjudication trial will begin, where the bank will claim the property as a guarantee of non-payment.

We know that we are all exposed to contingencies, so we recommend that, if at any time you have an eventuality that will affect the payment of your mortgage, go immediately to the institution to raise the problem and listen to their alternatives.

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Notas comunes de las hipotecas mobiliarias

Common mortgages notes
The most perfect description of the mortgaged property is required
The title of acquisition and state of charges must be indicated.

Recalls the Resolution of the DGRN of April 2, 2013, [j 1] that the chattel mortgage is reserved for those goods in which its identification is more perfect, considering susceptible to be taxed with chattel mortgage only the goods whose identification was "similar" to that of real estate »in order to guarantee its reipersecutoriedad. Hence, the text of the rule requires the concurrence of rigorous identification requirements according to the different nature of the assets subject to mortgage.

Consequently, the mortgaged property demands its most perfect description; the title of acquisition and state of charges must be indicated; now it is no longer required (modified by Law 41/2007 of December 7) the express manifestation of not being mortgaged, pledged or seized and the price of its acquisition fully paid; It is the mortgagor's fundamental obligation to keep the mortgaged property, making the necessary repairs and replacements, and if the good suffers depreciation (except fortuitous case) the creditor can request judicial intervention for the administration of the assets, which the Judge will grant or not and that, in any case, it can be avoided if the mortgagor pays sufficient security, fixed by the amount decided by the Judge.

Possibilities
At this point, two precisions:

It should be remembered that until Act 41/2007 mortgaged assets could not be mortgaged, which has always been considered a fundamental principle and thus:

The Resolution of the DGRN of April 9, 2002 [j 2] warned that the trick of forming a second mortgage and agreeing that the first and second mortgages have the same rank does not work
The Resolution of the DGRN of February 23, 2005 [j 3] said that the expression can not be constituted movable mortgage on assets already mortgaged should be understood as that the constitution is produced by the registration of the chattel mortgage, given the constitutive nature of the registration of the mortgage, at which time the requirement that the mortgaged property is free of charges must be referred.
But, the aforementioned law 41/2007 modifies art. 2 of the Chattel Mortgage Law, which has remained as follows:

1. The pact will not be effective to not mortgage or pledge the assets already mortgaged or pledged, so it may be constituted movable mortgage and pledge without displacement of possession on assets that were already mortgaged or pledged, although they are with the pact of not to mortgage or pledge. A chattel mortgage or non-possessory pledge may also be established on the same right of mortgage or pledge and on seized property or whose acquisition price is not fully paid. This section will have no retroactive effects.
As another novelty to remember, a fourth paragraph is introduced to art. 8 by virtue of which it is established that loans secured by a chattel mortgage or pledge without displacement may serve as hedges for securities issued in the secondary market.

It is a fundamental obligation of the mortgager to preserve the mortgaged property
Making the necessary repairs and replacements, and if the good suffers depreciation (except fortuitous case) the creditor can request judicial intervention for the administration of the assets, which the Judge will grant or not and which, in any case, can be avoided if the mortgagee Provide sufficient security, set by the amount decided by the Judge (Article 17 and 18).

Extrajudicial sale procedure
Law 15/2015, of July 2, of the Voluntary Jurisdiction? entered into force on July 23, 2015 - has amended the Movable Mortgage and Pledge without Displacement Law (Law 16 December 1954), which regulates the extrajudicial sale procedure in articles 86 and following.

It is essential to be able to use this procedure to comply with all the provisions of the current article 86 of the Movable Mortgage and Pledge without Displacement Law.

This precept says:

In order for the extrajudicial sale procedure to be applicable, it will be necessary to:
1. That in the deed of constitution of the mortgage be designated by the debtor, or by the non-debtor mortgagor, as the case may be, an agent representing him, in his day, in the sale of the mortgage assets. This agent may be the creditor himself.

2. That the price at which the interested parties value the goods is also stated. The type of auction agreed upon may not be different from the one established, as the case may be, for the judicial procedure.

3. That the debtor, or non-debtor mortgager if applicable, establishes an address for requirements and notifications. An electronic address may also be designated, in which case the requirements and notifications will also be made in that form.

In everything not specially regulated in this Law, will be applied additionally to the compulsory extrajudicial sale derived from the movable mortgage and pledge without displacement, the rules on electronic auction contained in the procedural legislation.

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Notes on the reverse mortgage

Notes on the reverse mortgage

It is not about explaining in depth what is a reverse mortgage, nor its advantages and disadvantages.

Perhaps it would be best to read the article of the Ministry of Labor with the title Reverse Mortgage and similar figures, although regarding the reference to expenses is published before the suppression of the tax of documented legal acts and the reduction of notary fees and register them.

What we should make clear is:

That normally is not a loan, but a credit that is guaranteed with a home, be it first residence or not.
That if it is a credit, its availability is agreed: a little each month and during the maximum term agreed; It can include as a first provision the amount necessary for the expenses of its formalization.
That it is not a life annuity, neither civilly nor fiscally; The owner of the home given as collateral is still the owner of the home, you can cancel the mortgage and request a new one if it increases the value of the same and requires more monthly liquidity, or you can dispose of it, canceling the mortgage, and make the difference between the price of the sale and the debt; fiscally, you are holding a loan, you do not receive a life pension taxed; It does not have the 18% tax, although it will be a second residence, since it has not alienated the house, etc.
Regulations in the reverse mortgage
General rule
All the general rules on loans or mortgage loans will apply to you, but it has its special regulation.

Regulations in particular
Law 41/2007, of December 7, which modifies the Law 2/1981, of March 25, of Regulation of the Mortgage Market and other regulations of the mortgage and financial system is what is also called regulation of the reverse mortgages.

Your statement of reasons indicates its advantages and its concept by saying:

The reverse mortgage regulated in this Law is defined as a mortgage loan or credit from which the owner of the dwelling makes provisions, normally periodic, although the provision may be one-time, up to a maximum amount determined by a percentage of the appraisal value at the time of the constitution. When this percentage is reached, the major or dependent ceases to dispose of the rent and the debt continues to generate interest. The recovery by the entity of the arranged credit plus the interest normally occurs once when the owner dies, by cancellation of the debt by the heirs or the execution of the mortgage guarantee by the credit institution.
And keep saying:

There is no doubt, then, that the development of a reverse mortgage market that allows older people to use part of their real estate to increase their income offers great potential for generating economic and social benefits. The possibility of enjoying the accumulated savings in the home in life would greatly increase the ability to soften the profile of income and consumption throughout the life cycle, with the consequent positive effect on welfare.
The law itself has provided for a regulatory development, but this does not preclude its immediate application; There are certainly Laws that contain delegation or remission receptive to the Executive (as the Law of Bases), but outside these cases the Regulations provided are simple development of the Law, submitted to it and before its enactment the Law already has direct force, as is the case that concerns us. As the DGRN says in resolutions dated January 11, 2011 [j 1] and November 4, 2010: [j 2]

such development rules are not essential for the new product - reverse mortgage library - to be able to deploy its effects, (...) And it is that in the cases of normative referral made by an Act through a re-sending to a later regulatory regulation in favor of the Administration, outside of the cases of legislative delegation or remission recepticia (case of the Basis Laws referred to in Article 82 of the Spanish Constitution), the referring law has direct and own regulatory force, so that the development of the legal remission to the Regulation arises a strictly regulatory rule, and therefore subordinated to the law of referral itself, without that the visndi obligation of this is conditioned to the previous production of the regulatory standard, unless that was expressly provided by that Act or result essential because of its content.
On the other hand, it is necessary to take into account the provisions of Order EHA / 2899/2011, of October 28, on transparency and protection of the customer of banking services, which, as its name indicates, applies to the services provided by credit institutions. (Article 1. Purpose.: The purpose of this ministerial order is to guarantee the adequate level of protection for customers of credit institutions, through the implementation of transparency measures in the loan

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Admission of the unilateral mortgage

Admission of the unilateral mortgage
The admission of the unilateral mortgage was consecrated by the current Mortgage Law (LH) which in article 141, among the voluntary mortgages, cites the one constituted by unilateral act of the owner of the mortgaged property. The precept develops the art. 237 of the Mortgage Regulation (RH).

That is, not only unilateral mortgages are currently admitted, but they are duly developed legislatively and jurisprudentially, so that according to the aforementioned article 141 the acceptance of the person in whose favor they were established or registered will be recorded in the Registry by marginal note, whose effects will be rolled back to the date of its constitution. If the acceptance does not appear after two months have elapsed, counting from the requirement that for such effect has been made, the mortgage may be canceled at the request of the owner of the property, without the consent of the person in whose favor it was constituted.

And art. 237 of the RH regulates the cancellation of these mortgages.

The most frequent assumption of unilateral mortgages is that granted in favor of the Administration (especially in the case of deferrals in the payment of tax obligations) or in favor of credit institutions (in situations of economic difficulty of companies, individual or legal persons, to be able to refinance the debt).

It is not this place, being a practical work, to analyze whether the unilateral mortgage is an assumption of reservation of rank, or is a mortgage subject to suspensive condition, or is a unilateral legal business that causes or does not cause either the acquisition or the constitution of a real right, or it is an expectation of a mortgage, or it is a real fact, but it is not yet a real right and other puns that are desired; in any case, as expressed in the Resolution of the DGRN of March 4, 2010: [j 1]

Notwithstanding the qualification or nature attributed to the unilateral mortgage, this will require, for the full effectiveness of the real right, its prior acceptance. Hence, this General Directorate, has been recognizing in its various resolutions the lack of effectiveness of the unilateral mortgage that is pending acceptance, since it does not arise as a real right but since it is "formally accepted."
Therefore, the practical rules and effects of these mortgages are of greater interest.

Requirements for the constitution of a unilateral mortgage
As it is a case of unilateral constitution, the rules and the normal requirements of any voluntary mortgage must be taken into account for its constitution, and only with respect to the mortgaging party, which can be summarized as follows:

* Personal element: ability of the mortgagee and possibility of non-debtor mortgage, all of which is studied in Personal Mortgage Elements. At this point, it should be noted that the mortgagee's capacity is required at the time of the constitution of the mortgage, not affecting the subsequent vicissitudes, such as the case dealt with in the Resolution of the DGRN of November 2, 2011 [j 2] (The declaration of bankruptcy of the mortgagor before the mortgage deed was presented to the Registry, but this was prior to the date of the declaration of course.)

* Objective element, with application of the general doctrine that is analyzed especially in the following topics:

Things and rights that can be mortgaged

Obligations that can be guaranteed with mortgage

Objective extension of the mortgage

* Formal element: as in any mortgage public escrtitura is demanded, but, in addition, that is expressly constituted as a unilateral mortgage; for that reason, the Resolution of the DGRN of May 23, 2013 [j 3] assuming that Article 138 of the Mortgage Law allows voluntary mortgages to be unilaterally or bilaterally constituted, affirms that it can not be understood that a bilateral mortgage that may be defective because a defect in the consent of the creditor has been automatically converted into a unilateral mortgage and subject to the regulation of article 141 of the Law, since the peculiar effects that this last type of mortgage entails require that it be constituted expressly with that character.

Effects of the unilateral mortgage
* Before being accepted:

The Mortgage acts as a lien or charges on the mortgaged property, remaining under the protection of the fundamental principles of the system and affecting the potential purchaser of the property.

The unilateral mortgage, once registered, must be understood as existing without prejudice to the effects of a possible non-acceptance in the specific cancellation procedure referred to in Articles 141 of the Mortgage Law and 237 of the Mortgage Regulations. It is created by means of the inscription of the deed of constitution a facultative right or of legal modification from the side of the creditor and a binding offer from the side of the constituent in the terms that

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A traditional principle has been that with a mortgage you can only guarantee an obligation. This must be understood in its correct sense: thus, in the frequent case of a mortgage loan, what was meant is that a mortgage could only guarantee a specific loan; and, in general to an obligation would correspond, in his case, a mortgage.

But, even in the case of a mortgage-a loan, the mortgage guarantees the various benefits of the debtor that derive from its obligation; thus, in the case of a loan, having to be well determined, the return of the capital, ordinary interest, late interest, costs and expenses, etc. is covered.

However, this principle is under review, and it can be affirmed that a mortgage can, in certain cases, guarantee several obligations.

 Different can receive a single mortgage coverage when they have causal connection with each other or dependence on one another

And adds:

On a purely literalist interpretation of Articles 1876 of the Civil Code (CC) and 104 of the Mortgage Law (LH) must prevail that with logical, systematic and finalist results from other legal provisions, such as Article 1861 of the Code itself or 154 and 155 of the LH, and attending to the needs of the legal traffic.

In effect, the DGRN continues:

Undoubtedly, different obligations can receive a single mortgage coverage when they have causal connection with each other or dependence on one another. It is not prevented by the application of the specialty principle or the accessory of the mortgage, insofar as the different obligations are determined in their defining aspects (or at least these are determinable, as -with notable flexibility, in order to facilitate credit -It is allowed in some cases, provided that certain minimum requirements are met) and the mortgage constituted is linked to these different obligations so that it is duly subject to them at birth, validity and enforceability.

And concludes the DGRN:

When these various obligations guaranteed by a unitary mortgage relationship are not subject to the same legal regime and have different title to achieve their mortgage effectiveness, it will be necessary, in principle and for requirements of determination of the real right constituted - Articles 9 and 12 LH -, establish separately the amount that respect of each obligation will cover the guarantee.

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Characteristics of legal mortgages

Characteristics of legal mortgages
Voluntary mortgages are defined in art. 138 of the Mortgage Law (LH), however there is no precept that defines the legal mortgages, limiting art. 158 of the LH to point out that legal mortgages are those expressly admitted by the laws with such character and that the persons in whose favor the Legal Mortgage Act grants will have no other right than to demand the constitution of a special mortgage sufficient for the guarantee of Your right.

Its most important characteristics can be determined:

They have clausus numbers; the Law requires that they be expressly admitted. Therefore, it can not be extended to cases that are not legally envisaged; in this sense, as has been said with respect to community expenses or urbanization fees; Resolution of the DGRN of January 22, 2013 [j 1] states that the credit of the community of neighbors for debts to the community, is a preference that preaches the Law but does not have the character of a tacit legal mortgage nor is it a real right that allows altering the mortgage range, (putting before a previously registered load, especially if the owner of the latter has not been a party to the procedure); in this line the Resolution of the DGRN of June 23, 2014 [j 2], according to which in the listing of legal mortgages of Article 168 of the Mortgage Law does not appear any legal mortgage by reason of preferential credits of the community of owners ; likewise, Sentence nº 163/2014 of AP Vizcaya, Section 4ª, March 11, 2014 [j 3] when it says that there is no norm that expressly indicates that the urbanization quotas are considered as tacit legal mortgages.
They are granted by means of the corresponding duly registered title (thus Article 159 of the LH says that for the legal mortgages to be validly established, the registration of the title in virtue of which they are constituted is required, and Article 294 of the RH says that in the act of granting any public instrument, from which the right of legal mortgage in favor of any person, the Notary, subject to the provisions of the notarial legislation, will warn those who correspond, if they attend the act, of the obligation to lend said mortgage and the right to demand it.
The so-called tacit mortgages have disappeared, although sometimes they are mentioned as such, which are preferred loans; in effect, the one cited as such in art. 78 of the General Tax Law when it says that "in the taxes that periodically encumber the assets or rights registered in a public registry or its direct, certain or presumed products, the State, the autonomous communities and local entities shall have preference over any other creditor or purchaser, even if they have registered their rights, for the collection of the debts accrued and not paid corresponding to the calendar year in which the payment is demanded and to the immediately previous) "; and they are not, then, as recognized by the Judgment of TS, Room 3, of the Contentious-Administrative, March 12, 1997 [j 4] the majority doctrine says that it is rather a real affection of the goods to some pre-existing obligations to its transmission.
In any case, as stated in the Resolution of the DGRN of April 3, 1998 [j 5] the legal mortgage, by implicating a restriction of the ordinary content of the right of ownership, can not be presumed but would claim an undisclosed legal establishment.
Now title and registration are required.

The Law gives the right to demand them in certain cases. According to art. 160 of the LH, the persons in whose favor the Legal Mortgage Act recognizes may demand said mortgage on any immovable property or real rights that the obligor may have at any time, even if the cause that gives rise to it has ceased, such as the marriage, guardianship, parental authority or administration, provided that the obligation that should have been secured is pending compliance.
They are constituted as a guarantee of certain interests needing protection. The constitution may be voluntary (extrajudicial) or require its constitution and, where appropriate, its extension judicially, in which must proceed in accordance with art. 165 of the LH, namely:
1st The one that has the right to demand it will submit a brief in the Court or Court of the domicile of the obligor to borrow it, asking that the mortgage be constituted, fixing the amount for which it should be constituted and indicating the assets that may be taxed in it, or at least , the Registry where those registered by the same obligated person must be registered.

2nd. This document will accompany precisely the title or documents that produce the legal mortgage right, and if possible, a certification from the Registrar in which all the mortgageable assets possessed by the defendant are recorded.

3rd. The Judge or the Court, at his hearing, shall bring to his presence all those interested in the constitution of the mortgage, in order that they may accrue, if possible, as to the way of verifying it.

4th. If they agree, the Judge or the Court shall order the mortgage on the terms agreed upon.

5th If they do not agree, either in regard to the obligation to mortgage or in terms of the amount to be insured or the sufficiency of the offered mortgage, the claim will be transferred to the defendant and the proceedings will be followed for the proceedings. incidents in the Civil Procedure Law (LEC).

These mortgages are framed, as a general rule, within the so-called security mortgages.
The legal mortgage, once constituted and registered, has the same effects as the voluntary one, without more specialties than those expressly determined in this Law, whatever the person who must exercise the rights that the same mortgage confers. (Article 161 of the LH). And therefore, in the case of expansion, will not affect the holders of rights in rem registered prior to the extension

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How do I cancel mortgage insurance?

How do I cancel mortgage insurance?

Law for the protection of homeowners

In general terms, the lenders / investors will allow you to cancel the ("private mortgage insurance," or private MI, for its acronym in English) when you have accumulated sufficient ownership capital in the home.

Since at MGIC we insure the provider, we can not cancel the MI coverage at the request of the owner of the home. You must contact your provider and have the cancellation requested.

However, if you have made your mortgage payments on time and have home equity, the cancellation of the MI should not be complicated at all. In fact, most owners cancel the MI long before the automatic termination date. Some even receive refunds upon cancellation.

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Law for the protection of homeowners

(Note: the following information was provided by the Federal Trade Commission)

The Homeowners Protection Act of 1998 - which came into effect in 1999 - establishes rules for the automatic termination and cancellation by the borrower of private mortgage insurance (MIP) on real estate mortgages. These protections apply to certain mortgages signed as of July 29, 1999 for the purchase, initial construction or refinancing of single-family homes. The protections do not apply to FHA or VA loans sponsored by the government, nor to loans with MIP paid by the lender.

For real estate mortgages signed as of July 29, 1999, the SHP must - with some exceptions - automatically terminate upon reaching 22 percent of the home equity of the home based on the original value of the property, as long as the payments of the mortgage are up to date.

You can also cancel the SHP if you apply - with certain exceptions - when you reach 20 percent of the home equity of the home based on the original value of the property, as long as the mortgage payments are up to date. One of the exceptions is if you have not been punctual in the payments during the year prior to the time of termination or cancellation. Another exception is if you have other liens on the property. A third exception is if the property has not decreased in value with respect to the original value. For those loans, the SHP can continue. Consult your lender or loan servicer (company receiving the payments) for more information about these requirements.

If you signed the mortgage before July 29, 1999, you can request that the SHP be canceled once it exceeds 20 percent of the home equity. However, federal law does not require that the lender or loan collector cancel the insurance.

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The mortgage process

The mortgage process

Verification of assets. Credit reports Insurance applications. Many home buyers are wondering where the process begins and where it ends.

To help better understand the process, we have outlined the basic steps involved in buying a home. The length of time will vary depending on the geographic location, the loan, you and the institution that grants you the loan.

Request

You have chosen a loan program and are now ready to complete the loan application with the help of the lender.

In order to expedite the application process, the lender may provide you with a list of the documents you must bring with you. If you have already met with the lender to obtain a pre-qualification for financing, you may have already given some of this information. Even so, take the documentation with you again when you return to submit your mortgage loan application.

When you have completed the loan application, the lender will verify or confirm all the information that you have provided. Depending on the requirements of the loan program, the lender may request additional information.

Shortly after you have submitted the loan application, you will receive these documents from the lender:

The Loan Estimate (LE, for its acronym in English)

It is the provider's best estimate of what the closing costs will be. It shows a calculation of the amount of the rates that the lender can charge you to process or close the loan, such as mortgage insurance, title insurance and property registration expenses.

It also provides a summary of how the loan will be paid and details the costs associated with the loan application. Indicate the financing charges, the annual percentage rate (APR), the amount of payments you will make, the amount of each payment (in the case of fixed rate loans), the charges for payment outside of term that may correspond and the total amount you will pay of capital and finance charges throughout the term of the loan. The information in the Comparison of Loan Estimate section will help you compare the cost of different loan offers. To compare the costs, you will want to make sure you compare the same type of loan.

Letter of engagement

The lender will send you a Letter of Commitment, which is a promise on your part to make a loan. It includes all the specific information of the loan, as well as the conditions that must be met before or at the time of closing, as well as information about the loan amount, the term, the origination costs and the interest rate.

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Request for documents for the loan file

The lender requests the following documents and then waits for them to be delivered:

Appraisal of property

The appraisal is requested to estimate the market value of the property. The maximum loan amount offered by the lender will be based on the purchase price or the appraised value, whichever is lower.

Credit report

If you do not have some traditional type, you must provide some other evidence of your ability and willingness to pay debts, such as payment order receipts or canceled checks for rent or service bills.

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Evaluation

The lender generates a loan file with all the required information and passes that file to a risk assessor.

The risk assessor ensures that all requirements are met. Sometimes a risk assessor needs additional information to make a decision. The two typical scenarios that the lender may present to you are:

More information is needed to be able to approve the loan. In that case, it is essential that you provide the additional information as soon as possible.

The risk evaluator approves the loan "with conditions". That means that you must provide additional information during the closing of the operation, before the loan becomes final.

Preliminary closing

Once the loan is approved:

The insurance for the title is requested.

The conditions for approval are met.

The closing date is scheduled.

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Closing

Once the closing date is scheduled, the lender applies for homeowners insurance, which covers damages or losses caused by events such as theft, fire, vandalism or windstorms. Since your property is the guarantee of your mortgage loan, your lender wants to be sure that the value of your home is protected in case it is damaged or destroyed. Contact your insurance agent to obtain a provisional policy.

At the time of closing, the borronee recidives the proceeds of the loan and presents a certified check to coverr The avance balance and closing costs. The loan is closed. The borrower moves to his new house.

Tips for the test: Obtain the mortgage

You must know and understand the following information in the Get Mortgage section:

Your rights as a home buyer

According to the Fair Housing Law, no lender can charge excessive fees or refuse to grant a mortgage loan based on:

Sex / gender

nationality

Religion

Race or skin color

Family status

Disability

Abusive mortgage loans, the practice of knowingly lending more money than a borrower can pay, takes credit line borrowers and destroys the benefits of owning a home.

The points are an expense that is paid only once to the lender, and covers its operating cost. One point equals 1% of the loan amount.

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Choose the best loan

An advantage of the fixed-rate mortgage is that the monthly payment of principal and interest is predictable and invariable throughout the term of the loan.

Variable rate mortgages are possible options for borrowers who are able to handle increases in payments on the fly.

To choose the most suitable loan according to your needs, you must take into account the possibility of significant increases in the interest rate, how long you intend to live in the house and whether your income is stable or fluctuating.

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The mortgage process

A Loan Estimate could include the amount you will pay in points on the loan, the estimated charges for securing the title deed, and an estimate of closing costs.

A provider may require the following documentation to examine your income: W-2 forms that cover the most recent two fiscal years, the most recent proof of payment from year to date, and bank statements.

Some of the benefits of mortgage insurance are that it allows the buyer to acquire a home with a little advance or without it, financially protects the lender by making it possible to make more loans with low advance and allows the buyer to acquire a home sooner and accumulate property capital more quickly

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What is mortgage insurance

What is mortgage insurance

For most buyers, the biggest obstacle in obtaining their own home is the advance payment. Private mortgage insurance ("private mortgage insurance," or private MI) allows you to buy a home with a lower advance than would be necessary in other situations.

In general, lenders and investors require mortgage insurance for loans with advances of less than 20%. MGIC mortgage insurance provides lenders with a financial guarantee in the event that a loan is subject to foreclosure. This guarantee allows many lenders to not require an advance of 20% when they grant loans for housing.

This is how it generally works:

A borrower who purchases a home of $ 150,000 pays a 10% down payment, or $ 15,000.
The lender obtains private mortgage insurance on the borrower's $ 135,000 mortgage, thereby reducing his risk of loss from $ 135,000 to $ 101,250.
Private mortgage insurance covers the upper portion of the mortgage: usually between 25 and 30%. In this case, the mortgage insurance absorbs 25%, or $ 33,750, of any final loss that the lender may suffer.
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What are the benefits?

While mortgage insurance is clearly beneficial to lenders, often homebuyers do not take into account the benefits that insurance can offer them. They can be important and include:

Buy a home more quickly: a loan to a higher value means the need to save less time to collect an advance.
Greater purchasing power: if you have a certain amount reserved for the advance, using the mortgage insurance can allow you to spend more expensive housing than you would if you had to pay an initial 20%.
Expansion of cash flow options: You can pay a lower advance and keep cash for other purposes (make investments, pay off debts, pay for home improvements or cover emergencies).
Receiving a refund: some mortgage insurance options allow the prorated reimbursement of premiums after cancellation.
Faster approvals: Loans with mortgage insurance are usually approved more quickly than those without mortgage insurance or government-supported structures.
Cancellation of coverage: many mortgage insurance options allow cancellation when they are no longer needed.
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Mortgage insurance options

MGIC works in partnership with lenders to offer several options to buy a home. Our most popular programs include:

MGIC monthly premiums
With this option, you will not experience any increase in the loan amount and you will not need additional cash for closing. The loan amount is paid along with the monthly mortgage payment. Generally, the mortgage insurance coverage can be canceled once the loan amount reaches between 75 and 80% of the value of the home.
MGIC's unique premiums paid by the borrower
With this premium plan, you will have the option to pay the mortgage insurance premium in a lump sum at closing without making monthly payments. Depending on the lender's guidelines and your individual situation, you may be able to finance the premium in the total amount, thereby reducing closing costs. However, many lenders do not allow financing the premium on the loan, especially if the borrower does not pay at least 10% in advance, so this option may require a higher payment at closing.
Divided premiums of MGIC
With this option, a portion of the mortgage insurance premium is paid in advance for the closing, in order to reduce the amount that must be paid along with the monthly mortgage payment. As with the single premiums paid by the borrower, you will have the possibility to finance the amount of what is paid in advance. Also in this case it will depend on the lender and the advance you pay. This premium plan is also cancelable.
MGIC mortgage insurance paid by the lender
As the name implies, with the MGIC mortgage insurance program paid by the lender, it is the lender and not you who pays the mortgage insurance premium. However, to cover the cost of the premium, the lender may increase the loan charges or the interest rate.
The important thing to remember is that MGIC mortgage insurance offers several options. Buying a home is one of the most important financial decisions that can be made in life. It is convenient to take it after knowing all the options.

Mortgage insurance of MGIC and FHA

Private mortgage insurance is the private sector alternative to mortgage insurance from the Federal Housing Administration (FHA), which is a government program supported by taxpayers.

Both MGIC's mortgage insurance and the FHA's government program help borrowers buy a home with an advance of less than 20% of the property's value. Most providers offer both options. However, to determine what is the best option for you, you must assess your personal situation. Therefore, it is important that you make sure that the provider presents you with both options.

When making a decision, do not evaluate only the difference of the monthly payments or the interest rate. While those two aspects are important, the mortgage is not an event that lasts only one day. Remember also to take into account long-term factors, such as total financing costs and the accumulation of property capital.

Some of the advantages that MGIC mortgage insurance can offer you are:

Save thousands of dollars in total mortgage insurance expense and increase property capital, not the loan amount
FHA requires an upfront premium that is often financed in the loan, which is why the loan amount and long-term debt obligation increase. With MGIC's monthly mortgage insurance, you do not need to pay any premium in advance, which allows you to save thousands of dollars in mortgage insurance premium payments for the entire duration of the loan and immediately place you in a much better position. terms of property capital.
Lower monthly payments or similar
Undoubtedly, the monthly payment is an important aspect. Borrowers with good scores or who pay an advance above the minimum will discover that MGIC mortgage insurance is a very competitive option when compared to the FHA.
The opportunity to cancel your mortgage insurance coverage
For a 30-year mortgage, the FHA will not normally allow you to cancel the monthly mortgage insurance payment unless you have paid 10% or more down payment at the time you receive the loan. And even in that case, you'll have to wait 11 years before you can cancel coverage.

However, private mortgage insurance must be canceled automatically once the loan has reached a certain LTV, and the borrower can request that it be canceled sooner. In fact, most credit providers allow you to perform a new appraisal to determine if you can cancel your MGIC mortgage insurance and reduce your monthly payments. A new appraisal allows you to take advantage of increases in the value of your property as a result of the improvements you have implemented or the revaluation of the market.
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Law of Fairness of Reports (FCRA)

Why did I receive a letter about an adverse action?
If you receive a notice of adverse action from MGIC, it means that your lender applied for MGIC mortgage insurance coverage for your loan and, based on a credit score or other credit report data that you provided to MGIC, we decided Do not insure the loan or that the rate that we should charge the lender for the mortgage insurance will be higher than it would be if your credit information were better.
What information on my credit report made the mortgage insurance rate higher?
The score that MGIC uses to determine the mortgage insurance rate that will apply to your loan is based on the information in your file at consumer credit reporting agencies. The scores are determined through a model at the moment they are requested. Although companies do not disclose the formula they use for credit scoring models, most of them are based on a combination of several factors, such as the credit payment history, the amount of money owed, the extent of the history and other factors. factors. If you request your credit score, ask about the factors that influenced the calculation.
How do I claim if I feel that my credit report information is not accurate or is not complete?
The notice includes the name and contact information of the consumer reporting agency that produced the score or information we used to make our decision. Contact the consumer reporting agency to request a free copy of your credit report. Along with the report, you will receive instructions to correct information that you believe is inaccurate or incomplete.
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What is the Equity Law of Credit Reports?
The Fairness of Reports Act (FCRA) is a federal law that promotes the accuracy, impartiality, and privacy of the information contained in the records of consumer reporting agencies (known as

What is the Mortgage Guaranty Insurance Corporation?
Mortgage Guaranty Insurance Corporation (MGIC) is the leading provider of private mortgage insurance in the country. We are the founders of an industry that has allowed millions of families to buy a home of their own. Private mortgage insurance allows buyers to pay an advance of just 3% of the purchase price to purchase a home.
I did not give them permission to request a report on my credit situation, so how can they have obtained my credit report?
The Fairness of Reports Act (FCRA) restricts the purposes for which consumer reporting agencies can provide credit reports. You have the ability to provide written instructions to authorize a consumer reporting agency to give your credit report to another person. However, according to the FCRA, consumer reporting agencies may also submit your credit report without your consent to other people, such as lenders and insurers who are involved in an application or insurance that you have made. Since MGIC evaluates a mortgage insurance requested following your loan request, according to the FCRA you are allowed to obtain your credit report.
How will my information influence the mortgage insurance rate?
Lenders usually charge borrowers the cost of mortgage insurance. MGIC offers mortgage insurance programs for various types of loans and credit profiles. If you receive a notice of "adverse action" from MGIC, it means that, in the program applicable to your loan, the rate we charged to the lender for the mortgage insurance was greater than our lowest rate based on your information. of credit. Depending on how the lender recovers the cost of the mortgage insurance premium on your loan, the payments or loan charges that you may have to pay may be higher than in the case of the mortgage insurance rate. it was lower.
What happens if there has been an error or incorrect information has been included in my credit report?
The rate that MGIC charges the lender for mortgage insurance is based on the information provided by the lender. If corrected information is received before closing the transaction, it may influence the mortgage insurance premium; however, the insurance will become effective when the loan operation is closed. Correcting the wrong information in your credit file is important and can improve the terms of the credits and insurance offered in the future. For information on how to correct incorrect information in your credit file, visit the FTC website.

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Legal mortgages are those that the Law gives the right to demand in certain cases, in guarantee of interests in need of protection.

Legal mortgages are those that the Law gives the right to demand in certain cases, in guarantee of interests in need of protection.

Content
1 Characteristics of Legal Mortgages
2 Legal mortgages allowed
2.1 Examination of the most important cases
2.1.1 Legal mortgages by dowry or paraphernalia
2.1.2 Mortgage for children under parental authority
2.1.3 Mortgage by reason of the guardianship
2.1.4 Mortgage of reserve assets
2.1.5 Mortgage in favor of the State, Province or Municipality
2.1.6 Legal Mortgage for Insurers
3 Additional Resources
3.1 In doctrine
4 Basic legislation
5 Legislation cited
6 Jurisprudence cited
Characteristics of legal mortgages
Voluntary mortgages are defined in art. 138 of the Mortgage Law (LH), in contrast there is no precept to define legal mortgages, limiting art. 158 of the LH to indicate that legal mortgages are those expressly admitted by laws with such character and that the persons for whom the Mortgage Law is granted shall have no other right than to require the constitution of a special mortgage sufficient for the guarantee of Your right.

Its most important characteristics can be determined:

They have clausus numbers; the law requires that they be expressly admitted. For this reason, it is not possible to extend to cases not provided for by law; in this sense, as has been said with respect to community expenditure or urbanization fees; the Resolution of the DGRN of January 22, 2013 [j 1] states that the credit of the community of neighbors for debts to the community, is a preference that preaches the Law but does not have the character of tacit legal mortgage nor is a real right that allows to alter the mortgage range, (in front of the load previously registered, especially if the owner of the mortgage has not been a party to the procedure); in this line the Resolution of the DGRN of June 23, 2014 [j 2], according to which in the list of legal mortgages of article 168 of the Mortgage Law does not appear any legal mortgage due to preferential credits of the community of owners ; as well as Judgment No. 163/2014 of AP Vizcaya, Section 4, March 11, 2014 [j 3] when it says that there is no rule expressly stating that urbanization fees are considered tacit legal mortgages.
They are granted by means of the corresponding title duly registered (thus article 159 of the LH says that legal mortgages are validly established requires the registration of the title by virtue of which they are constituted. in the act of granting any public instrument, which results in the right to legal mortgage in favor of any person, the Notary, subject to the provisions of the notarial law, shall notify those who, if they attend the act, of the obligation to lend such mortgage and the right to demand it.
The so-called tacit mortgages have disappeared, although sometimes they are mentioned as preferential credits; in fact are not real mortgages cited as such in art. 78 of the General Tax Law when it says that "in taxes that periodically tax assets or rights that can be registered in a public registry or its direct products, certain or presumed, the State, autonomous communities and local entities will have preference over any other creditor or purchaser, even if they have registered their rights, for the recovery of debts accrued and not paid corresponding to the calendar year in which the payment is demanded and to the immediately previous one) "; and they are not, because, as recognized in the TS Judgment, Room 3, of the Contentious-Administrative, March 12, 1997 [j 4] the majority doctrine says that it is rather a real affection of the goods to some obligations pre-existing to its transmission.
In any case, as the DGRN Resolution of April 3, 1998, [5] said, the legal mortgage, implying a restriction of the ordinary content of the right of domination, can not be presumed but would claim a legal establishment undoubted.

Title and registration are now required.

The law gives them the right to demand them in certain cases. According to art. 160 of the LH, the persons for whom the Mortgage Law recognizes may require such mortgage on any real estate or real rights that the obligor may have available at any time, even if the cause that has given rise to it, such as marriage, guardianship, parental authority or administration, provided that the obligation that should have been secured is pending compliance.
They are constituted to guarantee certain interests in need of protection. The constitution may be voluntary (extrajudicial) or required to be constituted and, if necessary, judicially extended, in which it must proceed according to art. 165 of the LH, namely:
1ª. Anyone who has the right to demand it

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The Mortgage Privilegium VIP of Banco Mediolanum, leader of the ranking of cheaper mortgages

The Mortgage Privilegium VIP of Banco Mediolanum, leader of the ranking of cheaper mortgages

The Mortgage Privilegium VIP is once again the cheapest mortgage in the market, just above the Mortgage Select of Liberbank, which occupies the second position of our 'top 10'. Both entities offer a differential of 0.85% to those who need financing for the purchase of a home. However, the mortgages of Banco Mediolanum have a more economical fixed interest rate (1.4% for 12 months, compared to 1.75% for 24 months of Liberbank), which allows it to occupy the highest position of our listing.

Otherwise, it should be noted that the Mortgage Privilegium VIP is not available to anyone. To be able to contract it is necessary to have a minimum net worth of 350,000 euros in Banco Mediolanum, of which 100,000 euros must be invested in managed savings products, such as investment funds.

As for the required bonding, the Mortgage Privilegium VIP requires that the client domicile his payroll (if he is an employee) and contract a home insurance and a life insurance.

With respect to the other characteristics, they are similar to those of other mortgages that can be found in the market, although with certain peculiarities:

It allows to finance up to 80% of the valuation value or purchase price (the lesser of the two) of a first dwelling
Offers a repayment term of up to 30 years
It charges an opening commission of 1%
Review the Euribor quarterly, rather than annual (or semi-annual), as with most mortgages on the market
The Banco Pichincha Mortgage Loan, among the least attractive
The Ecuadorean bank Banco Pichincha offers one of the least interesting mortgages on the market due, among other things, to its high differential: this loan earns interest of € 2.80%, which can be reduced to + 2.25% if the customer is willing to link with several products or services:

Domicile of payroll and / or social insurance
Domicile of three receipts from different companies
Life insurance
Home insurance
Credit card
In addition, the Banco Pichincha Mortgage Loan has a opening fee of 0.50%, subject to a minimum of 900 euros, charges for early amortization (0.50% for the first five years and 0.25% for the remainder of the term) and applies a fixed exit interest of 2.79% TIN during the first 12 months.

To keep in mind: is the mortgage loan always worth it?
The lack of a mortgage is an option that the banks offer to reduce the amount of the monthly payment that the consumer pays. To achieve this, some entities allow the client to pay only interest (partial grace) or to stop paying all of his or her monthly payment (total deficiency) for a period of time. Now, at what price?

As we told you in this analysis, asking for a lack of a mortgage generates a number of extra expenses:

First, the consumer will have to pay more interest on the loan because the repayment term is extended.
Secondly, the mortgage fee that will have to be paid once the grace period ends is always greater than the one initially paid to the bank
The third place, to ask for a lack there is to carry out a novation, a process that usually has expenses
Finally, some banks impose extra requirements or conditions during the grace periods: for example, they may increase the interest applied or require more related products to be contracted

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mortgage without commissions and save more than 2,000 euros

mortgage without commissions and save more than 2,000 euros


Some banks offer mortgages from Euribor + 0.99% with no opening, novation or cancellation fees
THE WORLD
When a bank gives us a mortgage, it charges us the "favor" for three main avenues: applied interest, life and home insurance that almost all mortgages "encourage" to hire, and commissions which are paid at the time of signing and during the life of the loan. The comparator HelpMyCash.com warns that, although the interest rate and the price of insurance are very important, the commissions are responsible for a few thousand euros of surcharge. What commissions do the mortgages have and how much do they cost in euros? Even the cheapest mortgages can have up to a dozen commissions, but the most common are the following four: Opening Commission. The bank charges for the management of opening the loan, the study of our case and the calculation of what our fee and conditions would be. Its cost ranges from 0% to 1.5%, but most banks that charge it apply 1%, that is, 1,500 euros of each 150,000 mortgage. Novation Commission. If at any time we want to change the conditions of the loan (lengthening the term, lowering interest, increasing capital, adding or removing a holder ...) the bank can charge us a commission of between 0% and 1%, being the most applied 1%. If this change we want to realize it in a mortgage of 150,000 euros when we only have 100,000 to pay, it would have a cost of 1,000 euros. Commission for early cancellation. If one day we have extra money and we want to give it to the bank to proceed with the payment of the mortgage, the bank can charge us a commission of between 0% and 0.5% of the amount contributed. If for example we give back 20,000 euros at a blow, we will have to pay 100 euros of commission. Subrogation commission. In the case that, after a few years, another bank offers us a mortgage much better than the one we have and we want to take the mortgage to that other bank, the bank with which we initially signed can charge us a commission of between 0% and 0.5% of the outstanding capital, equivalent to 500 euros per 100,000 mortgage pending. Thus, for example, a person who, in a bank with commissions, wants to change one of the holders of a mortgage of 150,000 euros when he there are 100,000 to be returned to the bank, can pay 2,500 euros: 1,500 per opening + 1,000 for novation. Figures that will be greater the higher the loan requested. How to avoid paying these fees? There are only two ways. The first is to look for a mortgage in one of the banks that announce that they do not charge these commissions, such as the Mortgage Orange of ING to Euror + 0.99%, the Mortgage Mari Carmen of Abanca to Euror + 1.25% or Mortgage Unoe to Eur. + 1.10%. Others such as Mortgage Santander to Eurur + 1.25% will only charge us the subrogation commission, that is, in case we go to another bank. The second route is negotiation. From HelpMyCash.com they give us the keys: "Mortgages are not closed-priced items such as shoes or a car, but the offer is tailored to each client. That is, two people who go to the same bank can come out with two mortgages totally different because the bank before making an offer will look at their monthly income, their ability to save, the number of holders, their age ... The interesting thing about mortgages are flexible is that they admit some 'bargaining' at the moment If the client has a good financial profile, he agrees with the rest of the contract and this is the only point that distances him from the firm, the bank can eliminate it.Another way of pressing is to get offers from other banks without commissions and presenting them to the entity of our interest, to see if it agrees to equalize the conditions, removing for example the commission of ap ertura, which would already save us more than 1,000 euros just to sign.

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How to get a mortgage 100% financing?

How to get a mortgage 100% financing?
A bank that finances up to 100% of the value of a property is not easy, since it is an operation that, due to its characteristics, has a higher default risk. That is why the maximum that the entities usually provide is up to 80% of the valuation or purchase value (the lowest of the two) when a first home is acquired or up to 70% when the loan is requested to buy a second residence. However, there are still several banks that have 100 mortgages in their product portfolio, so if we know where and how to look for them, we can come up with one. Let's look at what ways we can do with a 100 mortgage today:

Have an excellent financial profile: if our monthly income is stable and very high, our chances of getting a mortgage loan of these characteristics will be higher. In that sense, if we want to be granted a mortgage 100% financing to acquire a home that does not belong to a bank, we must have a salary of more than 2,500 euros per month, have a fixed job, have a certain work seniority, not having just outstanding debts for other credits and not appearing in delinquency files like ASNEF.
Request a mortgage for one of the floors of banks: the entities want to get rid of this type of assets, so if we choose to buy flats from banks, in many cases we can get more funding until reaching the total value of the living place. However, we must keep in mind that not all mortgages for bank floors are 100% mortgages, so the financing they offer may be less.
In addition, we have another way to get 100% financing mortgages, although in this case we would have to pay an additional surcharge: we mean to hire the services of a financial intermediary. These professionals, also known as brokers, have a very close commercial relationship with the banks, so they can negotiate for us the granting of more than 80% of the value of a home. In return, we will have to pay a commission of intermediation of between 1% and 5% of the principal of the mortgage obtained.

Whether you are asking for a full mortgage loan or for the usual 80%, if you have never asked for a mortgage we recommend you take a look at the following free guide.



Why is not it so easy to get a 100 mortgage?
Before the global economic crisis erupted, banks granted 100% mortgages or full financing of the value of the sale very frequently; in fact, many of them even gave more than 100% so that their clients could also pay the constitution expenses and other costs, such as a reform. This practice was very common in many countries, taking place, for example, during the Spanish real estate and financial bubble or before the subprime mortgage crisis in the United States. However, the situation has changed a lot since then: most banks now finance up to 80% of the lowest value between home purchase and sale, for variable mortgages as well as for mortgages. mixed and fixed.

Another reason why it is more difficult to obtain one of these loans is that Article 3 of Royal Decree 716/2009, which develops various aspects of Law 2/1981, of March 25, regulating the market mortgage loan and other mortgage and financial system rules expressly prohibits the securitization of mortgages that grant more than 80% of the financing, so that the entities can not sell them as assets to third parties (such as mutual funds, example). In practice, this means that banks can not monetize that debt, which forces them to assume all risk of default.

Find the best deals for banks floors
As we have pointed out in the first few paragraphs, one of the ways that now exist to obtain a 100% mortgage loan is to acquire one of the floors of the banks. These properties, which belong to banks, have several advantages, such as can be purchased with full financing mortgages, but also have several drawbacks, such as that usually come from foreclosures that ended the eviction of previous owners. If we want to acquire one of these houses, we can find them in the following ways:

Through the web portals of the entities or going to an office directly to ask for their offer of flats of banks. Many entities have created

Characteristics of 100 mortgages for bank floors
As the name implies, the main difference between these products and the rest is precisely the percentage of funding provided by the bank, although in other respects, mortgages 100 essentially have the same characteristics as mortgages which finance less than 100% of the cost of housing to be acquired. However, because of the high funding they allow us to get and to which they are normally granted to buy flats from banks, the conditions of these products can be something particular:

As the amount financed is higher, 100 mortgages can have longer mortgage repayment terms, usually up to 30 years or, in some cases, up to 40 years. Of course, we must count on stretch the mortgage 100 so that the monthly installments are reduced, the interest generated increase, so that the mortgage loan is made more expensive.
The mortgage appraisal is usually paid. Banks usually have all their property appraised, so we will not have to pay that expense. This translates into savings of between 200 and 400 euros.
Despite the above advantages, 100% mortgages are not cheaper than the rest. Banks often offer the same conditions in terms of linked products and commissions, the only difference in this regard is the higher percentage of financing, which as we have explained before could reach 100%.
And for a mortgage 100% financing, what requirements will I require?
If we have decided to buy a house and we have opted to acquire the floor of a bank (practically the only housing that can be financed with 100 mortgages), it is indispensable that we previously know what requirements must be met to access this kind of credits. Usually, the conditions that have to be met in these cases are very similar to those that would require us if we wanted to contract a traditional mortgage, although with some nuances:

Employment stability. One of the fundamental requirements of any loan. If we have seniority in our work, in a stable sector and with a certain position, our access to the 100 mortgage will be much more likely. This is coupled with the fact that (among all holders) they have a minimum income of 2,000 euros per month.
Highly qualified guards. Having a guarantor and having at least our own financial profile will always be a factor that the bank will take into consideration. However, it must be clear that this does not bring any benefit to the person who guarantees and yes many risks, as this is exposed to lose their present and future assets in case of default of the mortgage.
Double guarantee. A second home, other properties or even the guarantor's own assets can serve as double guarantees, in addition to the house we want to buy.
Savings to meet management expenses. Although mortgages 100 will finance the entire housing, we will still need money to cover housing purchase costs, typically ranging from 10% to 15% of the value of the property.
Do not appear in any record of delinquents. If we find ourselves ready like those of ASNEF or RAI, no bank will grant us a mortgage with 100% financing.
Make sure you can pay the mortgage 100%
Although 100% financing mortgages allow the purchase of a home without the 20% savings required by the bank, we must have approximately 15% of the purchase value to pay the mortgage expenses (except if the product they grant us) is a mortgage 100 plus expenses, something that is very complicated). In addition, as the total capital to be reimbursed will be higher, we must also keep in mind that the fees will probably be higher. Some banks will allow us to extend the time limit so that the cost of the monthly payments is more affordable, but since the maximum age when the contract expires can not exceed 75 years, we will not be able to stretch the mortgage to infinity.

At the time of making us with our 100% mortgage we will have to consider the following points:

Do not allocate more than 35% of the monthly income to the payment of the mortgage. According to the recommendation of the Bank of Spain, if we exceed this quota threshold, we will expose ourselves to default, since the economic pressure that would represent the monthly mortgage could prevent us from making the payment. In addition, if the mortgage were variable rate, a rise in the euríbor could put in check to our personal finances. So, to give us an idea, if we charge a monthly income of 2,000 euros, it is advisable that the fees do not exceed 700 euros.

Do not get into debt above the possibilities of each one, since we would run the risk of losing our home. Furthermore, since n

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This is how banks will make mortgage loans more expensive to cover the costs of formalization

This is how banks will make mortgage loans more expensive to cover the costs of formalization

The bank is already designing the strategy to face the last front it has open. After the European blow that forces the sector to return all the money overcharged by the floor clauses from the beginning of the mortgage, also must assume part of the expenses of formalizing the mortgage loans before notary, in the Property Registry or the payment of the AJD. A cost that, in one form or another, will end up paying the customer.

At the moment, as assures Juan Villén, responsible for idealistic mortgages, the entities do not have a defined strategy, although the market assumes that in the coming weeks will clear the unknown.

Until you know what the final roadmap will be, the main alternatives that are contemplated are the increase in interest rates on mortgages, the imposition of opening fees or the obligation to pay during the first year of life of the loan a fixed interest , despite the fact that it is a variable mortgage. In any case, the cost will be assumed by the mortgaged futures.

The first option on the table is the rise in interest rates, which directly impacts the share paid by the mortgaged. The sector itself has already made it clear that the increase in spreads would be a side effect of the judicial decisions that have given reason to those affected both in the case of the clauses ground and in the formalization.

Another alternative that is being discussed is to recover the commissions for opening mortgages, a condition that had practically disappeared in recent months in the face of fierce competition for lending. In this sense, mortgages that apply an opening commission interest rate (0.5%, 1% ...) and even set a minimum amount (500 euros, 1,000 euros ...) can be generalized.

The latter condition mainly penalizes small-scale loans. For example, in a mortgage of 100,000 euros, a minimum opening fee of 1,000 euros is to pay 1% of the requested amount, while, for a mortgage of 30,000 euros, it would be equivalent to 3.3%.

Now, as its name implies, this opening commission is only paid once: upon opening the mortgage. In contrast, the rise in interest rates affects the term that the mortgage is held.

The last option on the table that the bank has is to demand a specific interest rate for the first year, even if the mortgage is variable. That is, in a loan subject to a 1% + euríbor, the entity set during the first 12 monthly installments a 1.75% or even more. It should be remembered that at the very beginning of the mortgage is at least amortized (most of the share corresponds to interest and not to capital), so the bank would ensure an extra income with which to pay the cost of formalization.

So, as idealistic mortgages recalls, "it will become increasingly important to compare mortgages not just by interest rates, but by all the variables that come into play."

More concrete conditions, but no links

Financial sources assure idealista / news that some banks have already moved tab and have decided to raise prices and resume the opening fees with minimums never seen in exchange for assuming part of the expenses of formalization of new loans. On the other hand, others are considering "challenging" the Supreme Court ruling and maintaining the debtor's expenses, leaving prices unchanged, but adding transparency to the hiring process.

And that could be a constant from now on. The market, at least, is convinced that the financial sector will make sure to define in detail in the mortgage contracts each and every one of the conditions. In this sense, we can not forget that the nullity of these clauses decreed by the Supreme Court does not respond to the illegality of the same, but to the lack of transparency and concreteness in establishing them.

On the other hand, the market discards that the future mortgage offer brings with it a rebound of the bonds that the banks demand to the clients to improve their loan, like the use of cards, the contracting of insurance or the contribution to a pension fund .

What to complain and how to do it

The Supreme Court, in its ruling 705/2015, declared abusive the clause in which BBVA imposes on the borrower the payment of all expenses, taxes and commissions derived from the mortgage loan.

The reason is that the court considers that "all the taxes, commissions and expenses caused by the preparation, formalization, correction, processing of deeds, modification - including division, segregation or any changes that are

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