If you have a foreign mortgage that you are struggling to pay, don’t worry. Issues are easily solved when you approach them in the right way. Don’t make these common mistakes that can make your situation worse:
1. Hand Over the Keys
Many borrowers simply stop paying their mortgage and leave the keys with the lender, thinking this will free them of their responsibility. However, they do not realize that they left are in Negative Equity and are putting themselves in serious jeopardy as the outstanding debt can be aggressively pursued back home. If you don’t pay your mortgage, arrears will mount on your account. Following a period greater than three months your lender can commence repossession proceedings.
Once repossessed your lender will then likely market the property. Many properties sold in possession are purchased at a far reduced value, often around 60% of open market value. This can increase losses for both the Bank and the borrower. When the Bank sell the property, you will be left liable for any shortfall balance. The resulting debt can then be collected by lenders in your home country. We have seen instances when lenders have appointed UK Collection Agents and placed a second charge on a borrower’s home.
2. Ignore It
If you don’t pay your mortgage overseas it is likely to have the same consequences as in your home country. Some borrowers with mortgage debt in Europe hope that it will not follow them to the UK or Ireland. However, this is incorrect, and the foreign lender can legally come after you for outstanding debt.
3. Hope That Brexit Will Fix It
Even with the uncertainty of Brexit looming on the horizon, Spanish Banks have suggested that it will remain business as usual when it comes to foreign mortgages and chasing debt. Some people purposely voted ‘Leave’ in the hopes that their mortgage issues would be solved. Unfortunately, the solution is not that simple.
4. Don’t Talk to the Lender
It is essential that you talk with your lender if you have any issues paying your mortgage. If you ignore them then your home assets are at risk. Many borrowers fall victim to refinancing solutions that will nearly always leave you worse off. The best solution is to deal with your mortgage lender directly, and EU Property Solutions can help you through the process.
5. Go It Alone
Whilst the best solution is to talk directly with your lender, many people don’t know how or where to start. At EU Property Solutions we will work with you and deal with the lender on your behalf. We assist borrowers with property debt issues across Europe. Our main area of expertise is in Spain, Portugal, and Cyprus but we are obtaining successful settlement across the continent. We have a dedicated legal team based in Spain who deal with Foreign Mortgage issues every day and would be happy to help you.
Avoid making these foreign mortgage mistakes by calling us today 0330 124 1230 to arrange a free initial consultation.