Costs seem very high to change mortgage to interest only for two years

Hi,

Like many, we have been struggling to pay our mortage payments. I have negotiated with the bank to give us an interest free period for two years, on the proviso that we pay our outstanding debts. I am securing a separate loan to pay the outstanding debt, so hope it should all go ahead.

HOWEVER, the bank is quoting me 1,000 euros for notary costs. I have queried this, as i am of the understanding that the government passed a law to help reduce the associated costs for mortgage modifications. The bank manager has come back to me saying that it is to cover notary, registry and gestoria costs. Is this amount acceptable for a modification?

If anyone can advise me, it would be greatly appreciated.

Many thanks,

Fay

Hi Fay,

As you have negotiated new terms for your mortgage i.e. adding a period of 2 years Interest Only, this needs to be recorded on the mortgage deed and therefore the notary, registry and gestoria fees are applicable.  The cost depends on your mortgage amount and scale of fee applicable to the notary.  Unfortunately the new law is only relevent to residents and does not apply to non residents who own second homes / holiday homes.     

Hi and thanks for your reply. My husband is Spanish and we are residents, so the law should apply to us. My problem is that i don't trust my bank manager, as he takes every opportunity to sting us with charges and penalties! I just want to be sure that he is not trying it on with us.