Canceling the debt of a mortgage is definitely a relief for anyone. A lottery prize, a donation, an inheritance, or a sale, are for example, reasons why the borrower can raise the amount of money enough to terminate a mortgage loan. Also, of course, the payment of all mortgage installments.
The reclamador.es, online legal services company, has developed a guide explaining the main aspects and recommendations to be taken into account in this cancellation process. Not in vain, in 2017 313,716 mortgages were canceled in Spain, according to the National Institute of Statistics (INE).
Things that the "lucky ones" who can pay off their financial burden should know:
1. After paying the last installment
There is the possibility of doing nothing once the last installment of the mortgage loan has been paid, but it is not advisable, according to reclamador.es, since they are registered in the Property Registry and this information is used for subsequent actions. In other words, in the Property Registry the house will continue with the mortgage charge, even though the balance of the same is zero.
This is very important if, for example, they explain from reclador.es that property is sold or it is intended to request another mortgage, since the debt will appear as not expired in the Property Registry.
2. Cancellation at the Land Registry
It is the most advisable option, according to the online legal services company. In the same way that happens when you sign a mortgage, there is the possibility of delegate the paperwork in an agency or else do the mortgaged itself. To cancel a mortgage in the Land Registry, the interested party must, first of all, request a certificate of zero debt from the bank. This certificate must be issued free of charge by the financial institution, as indicated by the Bank of Spain.
The certificate of zero debt must be presented at the chosen notary and request the writing of the loan cancellation deed. This must be signed by the agent of the bank and, subsequently, go to the Ministry of Finance of the autonomous community to present the Tax on Documented Legal Acts (IAJD). Currently, this tax is exempt from payment for the client, so to cancel the mortgage it will be necessary to present it, but no amount will have to be paid.
Once these procedures are completed, the deed of cancellation of the mortgage will be collected and presented at the Land Registry so that the load of the house disappears.
3. Request simple note
If you proceed to the cancellation of the mortgage registration, once paid and made all procedures, the portal reclamador.es advises in turn request a simple note in the Land Registry to verify that the burden of the mortgage has disappeared.
4. Cancellation fee
There are few mortgages that have a loan cancellation fee, this means that if this clause is included, the borrower must pay, along with the remaining debt, this commission. To know if this penalty for early cancellation must be paid, explains reclamador.es, the mortgaged must go to the loan contract signed at the time of formalization. In turn, you should bear in mind that the maximum that the bank can charge is 1% of that outstanding capital.
5. Registry cancellation without writing
There is the possibility of canceling the mortgage loan without performing the steps described above, but for this, explains reclamador.es, the mortgagee will have to wait 21 years from the date of payment of the last installment. After that time, you can go to the Land Registry and submit a request for cancellation of charges due to expiration. If you do not go personally to the Registry, this request must be signed by the applicant authenticated by a notary, while if the interested person comes personally, it will be enough to go with the DNI so that the registrar verifies his identity.
Finally, it must be borne in mind that some registrars also request the document for the settlement of the Tax on Documented Legal Acts (although it is exempt from payment), explains the online company.