bank won't talk to us - can anyone help

Hi can anyone help me, we have a mortgage with Caja Canaries and are still paying a mortgage interest rate of 5.95% - we have been trying to talk to the bank about our options, and how we can reduce this rate by either switching to interest only or extending the term - we are struggling to find someone who can communicate to us in English - can anyone offer any advice.

They are also refusing to return calls to a Spanish lawyer.

Any help gratefully received

LMT

 Hi LMT and welcome to Eye on Spain.

Doesn't the bank have a customer service number you can call?  Maybe your best bet would be to pop into your branch when you're next over. 

Your mortgage rate should be removed automatically either every 6 or 12 months.  Has this not been done?

If you really are struggling get through to them then I would suggest you have a look at a service such as Costa Advice Bureau which for less than 100 Euros per year would sort out these problems for you.  I can't recommend them enough.

Best of luck with it.

Justin

Hi Justine

Thank you for this, our property is in Lanzarote would the costa advise bureau still be able to help us do you think?

Our mortgage is reviewed annually (Oct) but the repayments are crippling us due to a change in circumstances in the UK, we would like to move to interest only or extend the term but can't find anyone in the bank that will talk to us or make a decision.

;-(((

LMT

Yeah, they would be able to help.  Talk to Myra or Antonio and they'll tell you what they can do for you.  They offer a great service and are relentless in getting results.

Best of luck.

Justin

P.S. No offence that you think I'm a girl

Hi JUSTIN

Many Apologies - in my haste I turned you into Justine

Thank you so much for this I will get in touch with them first thing tomorrow to see if they can help me, I really appreciate your help as we are desperate to get some advise from someone trustworthy

Thanks again

LMT

Hi LMT,

Unfortunately your mortgage rate was reviewed when the rates were at a high level so you will not see the benefit of the now low rates until your next period in Oct!!    As well as Justin's good advise below, have you considered a re mortgage to an Interest Only product?  This may be an option for you as long as all your monthly repayments have been on time and without default.

Hi Sharon

the mortgage has been in arrears in the last few months but only because the bank were considering a Dacion en pago, and they told us to stop paying the monthly installments - I am today however transferring the funds to get the mortgage payments back on track and intend to continue paying these (even though they are crippling us) until I can get the bank to review the mortgage. Moving to an interest only would be preferrable even for a couple of years - but as they are now not talking it is hard to find a solution

I feel that it is unlikely that your current lender will alter their terms and conditions as I expect due to the economic climate in the UK and the dour exchange rate you are not alone in your overall predicament.

A remortgage is unlikely with arrears and if cleared the costs when compared to a remortgage in the UK are quite horrific, the number of lenders offering interest only in Spain tend to have less than favourable overall conditions, have you considered raising funds on your UK property which valuation wise will probably still come out higher (expressed as a %) than the spanish one?

Hi LMT.

Sorry to hear of your plight! You are not alone (small consolation I know) in that many Brits have been caught by the 'double whammy' of i) the Annual Review system (that most Spanish lenders use to reset the rate and mortgage payment and ii) the demise of the £/Euro exchange rate.

Having read the thread on this I can see that a Remortgage to an 'Interest Only' has been proposed to reduce the payment amount. Yes, this is a possibility for you to pursue but note that i) any arrears must be cleared with a 3 month period of wait to clear the record as it were and ii) there are potentially high costs. There is an exception to the latter via a cheaper 'switch' deal where the lender picks up most of the normal (5-6%) costs, but the terms are strict. Also, the Loan to Value will be limited to 50% to 60% maximum.

Bear in mind that, come October 09, you will see a much lower rate being applied to the existing mortgage. For example, it seems that the present rate of 5.95% is perhaps the Annual Euribor + 2%. That's a fairly hefty margin incidentally. Today, that rate should be say 4% so the interest element of the mortgage, assuming no change by October, should be 2% ish less than today. Do you know the make up of the present pay rate of 5.95%?

With only 5 months to go I cannot see that you will achieve much with an 'Interest Only' switch but then this is not just for the short term but also the long term as well. It has to be for the costs do not warrant a change just for a wee while!

Meanwhile, keep banging away at the existing lender and make sure that all communication is followed up in writing - to confirm the conversations!

Regards

Mark M