What may have started as one missed payment can quickly spiral into a serious issue. Often falling into arrears feels like a downward spiral that you can’t escape out of.
Fortunately, there are solutions available.
Read on to find out more about the consequences of arrears and the solutions available.
When buying a property in Spain, it is unlikely that you are one of the lucky few that do not need a mortgage. At the time, these always seem like a sensible investment. It may even seem like you could profit through rent or increased prices. However, even a small change in your financial circumstances can be the difference between affordable monthly payments and significant mortgage arrears.
Depending on the lender and the fine print of your mortgage, what starts as a missed payment can quickly spiral. These arrears can accrue additional costs, interest and fees. This can even result in legal action in Spain and your home country.
How many payments can I miss?
Generally, you will not be seen as having defaulted after just one missed payment. They can be difficult, but banks will give you a chance to get back on track. You can have extra fees added for falling into mortgage arrears.
However, after 2 or 3 missed payments, you will start to face more serious action from your lender. It is at this point that they can begin repossession proceedings if they want.
What are the impacts of mortgage arrears?
As mentioned, your lender will usually start the recovery process after 2 or 3 missed payments. This starts with threatening letters informing you of the consequences of not paying. After falling into mortgage arrears, you will likely have monthly fees added to your mortgage as well as additional interest.
These letters are largely designed to scare you into paying the full amount owed. We do not recommend responding to your lender. After this, they may begin repossession proceedings on your Spanish property.
If the sale value doesn’t cover the mortgage, you will be responsible for paying this shortfall. With costs and fees added, this could be a lot more than you think.
At this point, the lender may pursue you in the UK and seek to secure a judgement or even repossess assets in the UK.
Are there solutions for mortgage arrears?
Like any property debt issues, there are solutions for mortgage arrears. As long as you get the right help and advice. Whether you want a renegotiated mortgage, are worried about your UK assets or simply want to get rid of your property, EU Property Solutions can help.
We have been helping clients with mortgage arrears for over a decade, and in that timeframe, we have achieved settlements with all major Spanish lenders.
If you want to find out more about how we can help you, get in contact for a confidential and obligation-free case review.
Will A Mortgage Ever Be Written Off?
There is a common myth that if a debt is ignored for long enough, it will be written off completely. There is some truth in this. However, if there is communication, attempted communication or acknowledgement of the debt in any way, this is not the case. This means that, realistically, it is very unlikely that your mortgage will be forgotten about.
Do I Have To Pay If My Mortgage Was Mis-sold?
Another myth is that mortgages that were mis-sold do not need to be paid. You may have been mis-sold (especially if you bought pre-2008), but this is not a valid argument. It is essentially impossible to prove and cannot be used to release you from your financial obligations.
Why Should I Trust EU Property Solutions?
For over a decade, we have been helping people in exactly the same situation you find yourself in. We understand that you have probably been lied to by the bank, developers, and estate agents. If our amazing results don’t say enough for themselves, check out some of our testimonials or call our office and speak to a team member. You can even chat with previous clients of ours over the phone!
Why not get in contact?
We are always happy to offer a free, confidential review of your situation.
This helps us understand exactly what you need and helps you understand the best options to solve your property debt issues.