2023-07-03 00:10:35
Monday, July 3, 2023, 00:08
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Despite the liberating feeling that it triggers, paying the last monthly payment does not mean completely forgetting about the mortgage. Even if every last penny of the loan has been disbursed, a series of procedures must be resolved. The most important, cancel the mortgage.
At the time of signing a mortgage loan, the user signs both the deed of sale of the property and the loan before a notary. And both have to be registered in the Land Registry. That is where the debt continues to appear, despite the fact that no amount is owed anymore.
The Bank of Spain (BdE) assures that, although it is not mandatory, it is advisable to proceed with the registration cancellation of the mortgage. There are two ways to do it: personally take care of the procedures – and thus save what an agency charges – or entrust it to the financial institution with which the mortgage was signed. This may impose its own commissions and expenses, which must be reported in advance.
If you decide to do it on your own, the client must take these steps:
– Ask the bank for a certificate of economic cancellation of the debt, or ‘certificate of zero debt’, which is free.
– Choose a notary and deliver the certificate so that the notary prepares the deed of cancellation and contacts the bank. He will have to send a representative. The notary is entitled to charge fees, but not the financial institution for the transfer and the process of signing their representative.
– Go to the Treasury office of the corresponding autonomous community and fill out the document of Documented Legal Acts (IAJD).
– Go to the Property Registry with the three documents and cancel the mortgage. At this point you have to pay the registration fees.
What are the registration cancellation fees?
– Notary and registry. They are regulated by Royal Decree-Law 18/2012, of May 11. The amount will depend on the amount of the loan.
– Agency fees. They will depend on the rates that each one applies. In this case, moreover, they are not limited by law.
– Mortgage early repayment commission. The early repayment of variable-rate mortgage loans is exempt during this year, according to Royal Decree-Law 19/2022, which includes aid for mortgage users.
In the case of fixed-rate loans – and also next year for variables if the current regulations decline – the bank may apply a commission for early repayment. Its amount will vary depending on whether the contract date was before or after June 16, 2019.
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