Legal tip 1237. Legal help for mortgage debtors in Spain 4
Monday, December 1, 2014 @ 3:09 PM
New group of solutions when in lacking resources to pay your mortgage in Spain are straight negotiations with the Bank to change the terms of the mortgage and reduce payments so they will adapt to your current financial conditions. At the end of the day, that needs to be the soul of financial institutions, to provide finances (real finances based on real lifes)
The two options to modify mortgage terms to reduce mortgage repayments are: (1) novation and (2) subrogation.
Novation involves talking with our own mortgage bank and subrogation means to change your mortgage to a new financial institution.
Novation
Technical legal definition of novation is “the modification of an obligation by another one which will extinguish or amends the First" Novation can implies:
*Interest rate change
*Changing the benchmark.
*Making capital increases.
*Implementation of reductions or increases in the amortization period.
Subrogation
Mortgage subrogation is the operation of changing mortgage contract from one financial institution to another.
Cordoba, South of Spain