What are they?
A mortgage is a notarized document formalizing an agreement whereby a bank typically provides a person with a fixed sum of money to be repaid, along with interest, through regular payments over a specified period. The borrower guarantees repayment to the bank by offering real estate as collateral.
Types of mortgage procedures
Mortgages
Contracts in which a person guarantees the payment of a debt or obligation with an asset, usually real estate. In case of default, the property can be auctioned to satisfy the debt. Mortgages allow for financing for various needs. The mortgage holder has the right to choose the notary who will advise them.
Mortgage cancellation
This involves registering with the Property Registry that a mortgage debt has been paid off so that it appears free of the encumbrance. It requires paying the corresponding taxes and registering the change with the Property Registry.
Novations and Subrogations
These are modifications to a mortgage that may involve changes to the mortgage debtors, the lending institution, the term, the principal, or the interest rate, among other things.
Preliminary Transparency Agreements
These are notarial records related to consumer mortgages, where the client can discuss the mortgage terms with the notary calmly and without pressure. This notarial service is free of charge and only involves the client and the notary.
Deeds in Lieu of Foreclosure
These are contracts in which property is transferred in exchange for the extinguishment of a previous debt, thus releasing the previous debtor.
Required Documentation
Mortgages
Identity document (National Identity Card, passport, Foreigner's Identity Number, or residence permit) of the mortgage applicants, or documents certifying the identity and representation of legal entities.
Title deed of the mortgaged property or a copy of the Property Registry.
In necessary cases, such as with consumer mortgages, a prior transparency agreement is required.
Mortgage Cancellation
Full mortgage payment.
Obtaining a certificate from the financial institution confirming payment of the mortgage debt.
At the signing before the notary, only the representative of the financial institution is present, who must prove their authority to represent the institution in accordance with the general rules.
The financial details of the transaction.
Deed of constitution of the mortgage or the resolutory condition.
National Identity Documents (DNI) of lenders and borrowers.
If a company is involved, the powers of attorney or appointment of current directors.
Registration details in the Commercial Registry.
Cadastral reference (latest property tax bill).
Whether or not the property is rented.
Novations and Subrogations
Generally, both the financial institution and the current borrowers must sign. This involves the presentation of identity documents (national identity card, passport, foreign resident's card, or residence permit) for individuals, and documents proving legal capacity and representation for legal entities.
In certain cases, it is necessary to process a preliminary transparency report, which is free of charge.
Preliminary transparency reports
FEIN (European Standardized Information Sheet).
FIAE (Standardized Warnings Sheet).
Copy of the draft mortgage deed contract.
Periodic installments for fixed-interest loans.
Terms and conditions of insurance policies or linked products offered by financial institutions.
Costs of the future mortgage transaction.
Document proving that the client is entitled to notarial advice before signing the mortgage deed.
Deeds in lieu of foreclosure
Identity document (national identity card, passport, foreign resident's card, or residence permit) of the applicants for the deed in lieu of foreclosure, or documents certifying the legal capacity and representation of legal entities.
Title deed for the property being transferred in lieu of foreclosure.
Identification of the debt to be settled through the transfer in lieu of foreclosure.
For mortgage loans and debt acknowledgment:
Financial details of the transaction.
Title deeds for the properties being mortgaged.
National Identity Document (DNI) of lenders and borrowers.
Marital property regime of both parties.
If a company is involved, the powers of attorney or appointment of current directors. Registration details in the Commercial Registry.
For urban properties, a certificate from the homeowners' association confirming that community fees are paid up to date.
Cadastral reference (most recent property tax (IBI) receipt).
Whether or not the property is rented.
In what situations can this service be used?
A mortgage loan can be used in various situations, including:
Buying a home.
Home renovations or improvements.
Debt consolidation.
Acquiring land.
Financing real estate investments.