What to do if I cannot meet the mortgage repayments?

[Lawbird Lawyer]

Our bank manager in Murcia told us that it was free to extend the mortgage term only if you are a Spanish resident. Is this the case?
Thanks.

Dear Madam,

The paragraph quoted above specifies the property must be your permanent/main dwelling which implies you have to be resident to take advantage of this option, yes. In fact all the economical measures taken by the Government to ease the financial situation are really aimed at residents as only they will be able to benefit from them.

DISPOSICIÓN ADICIONAL SEGUNDA. No sujeción al gravamen establecido en el artÃ*culo 31.1 del texto refundido de la Ley del Impuesto sobre Transmisiones Patrimoniales y Actos JurÃ*dicos Documentados de las escrituras públicas de novación de préstamos con garantÃ*a hipotecaria que se refieran a la ampliación del plazo del préstamo.

No obstante lo previsto en el apartado 1 del artÃ*culo 31 del texto refundido de la Ley del Impuesto sobre Transmisiones Patrimoniales y Actos JurÃ*dicos Documentados, no quedarán sujetas a dicho gravamen y se extenderán en papel común las escrituras públicas que documenten la ampliación del plazo de los préstamos con garantÃ*a hipotecaria concedidos para la adquisición, construcción y rehabilitación de la vivienda habitual realizadas en el periodo de dos años a contar desde la entrada en vigor de este Real Decreto-ley.

[Unregistered]

I wrote to you previously saying that we have already extended our mortgage in september of last year. We have approached our bank informing them of the law that was passed in April 2008 as we meet all of the criteria for not paying the notary fees for the extension, but they are insistant that we are only exempt from paying the fees if we extend the term of our mortgage by only 2 years, and as we have extended our mortgage by 10 years the law does not count. Are they correct? your help would be appreciated.

[Lawbird Lawyer]

No, they are incorrect. The law doesn't mention at anytime that the extension has to be for 2 years. No one extends a mortgage for 2 years only, makes no sense financially as it will hardly reduce the monthly repayments which is exactly why one requests this extension in the first place.

This can only be achieved, as it stands to logic, through significant extensions of 10, 15, 20 years which will effectively greatly reduce the monthly repayments (although in the long run you will pay dearly for this privilege with increased interests).

Are you sure you are resident in Spain and this is your main permanent dwelling you are requesting the extension for?

[Unregistered]

Thank you for your reply I will be showing it to my Bank Manager, in answer to your question we have been resident in spain since 2006, my husband had obtained his certificate of residency in 2007 and I obtained mine in 2008 - 2 months prior to the mortgage extension.

Regards

[Lawbird Lawyer]

You're welcome Madam.