Facing the end of your interest-only term
The majority of Spanish interest-only mortgages allow you to have 10 to 15 years before switching to capital payments. When Spanish banks sold these loans, they failed to tell borrowers the jump that would take place at the end of the term, leaving clients struggling to keep up with payments.
On many occasions, we have seen €300 monthly payments turn to a staggering €3,000 overnight, and any failure to make the payments prompts the lender to start recovery action.
The implications of missing payments
Whether your property is unfinished, in negative equity, or occupied by squatters, Spanish banks will still require the new capital payments regardless of the situation.
Many of the banks and developers who sold these mortgages in the past are no longer trading, meaning it is hard to prove you were missold the property or loan. Many people think that they can miss payments and walk away with no consequences; this is no longer the case.
Borrowers are becoming more aggressive in collecting debt, even if they purchased it from a bank that has ceased trade. The majority will try to collect the funds in Spain, and if this fails, they will start proceedings in your home country. This comes in many forms, and typically, they will instruct UK-based solicitors or debt collectors. When proceedings start, they will hound you with letters and court judgements, and they can also put charges on your assets to win back the money.
Dealing with the issue head-on
Dealing with foreign debt issues can feel overwhelming, but there are always options, and the sooner you take action, the better.
EU Property Solutions is on hand to help you with your interest-only mortgage and find the solution to free you from the burden. Each case is carefully reviewed, and a plan of action is implemented to ensure you get the best result.
Call us today on 03301241230 or email [email protected] to book your free consultation.
Interest-only mortgages were previously available in Spain but were discontinued following the banking crisis.
- Substantial final repayment
- Increased interest expenses
- Greater risk and more challenging to secure
If you fail to meet your Spanish mortgage repayments, the lender has the right to repossess your property and sell it, typically at a reduced value.
