Case Study – Paid off Your Spanish Mortgage?

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A question recently received:-

“During our visit to Spain last year we discussed with our bank collecting the deeds of our property as we have now paid off the mortgage. We were told we had to make an appointment with someone from the bank to accompany us to the Notary to complete this process and have now been advised by the bank that we also need a solicitor to prepare the paperwork? We are not sure what paperwork required to obtain our deeds? We wish to know what is required to tie this up with the Bank. We currently live in the UK but visit the property a couple of times a year and hope to have everything settled on our next visit”

So how did we respond? Well, we advised the client that the information they had been given by the bank was correct. Once someone has fully paid off their mortgage their debt with the bank is extinguished. However, the entry of the mortgage at the Land Registry description of the property is not erased automatically. There is a process to do it exactly as the customers were informed.

Firstly their solicitor has to contact both the Notary and the bank to organise the appointment for the bank representative to attend the Notary and sign the mortgage cancellation Deeds. Their solicitor will later collect these Deeds and take them to the Land Registry office. This document will be sufficient for the Land Registry to remove the mortgage entry from the property.

This process has a cost as the Notary will invoice for the preparation of the mortgage cancellation Deeds, also the Land Registry for erasing the debt. The Bank also charges a small fee to cancel the mortgage. And also there are the fees of the solicitor. We charge 175€ plus v.a.t. for the whole process. As we cannot know how much will be the Notary and Land Registry bills in advance, we usually ask for a provision of funds to cover for Notary, Land Registry and our fees. This amount is always enough and there is something left to be refunded to the clients afterwards.

There is no need for the clients to be present at any stage of the process as they do not have to attend the Notary, only the bank.

We are very happy to help any clients who have paid off their mortgage, but need to have it removed from the Land Registry.

14 Comments

  • Michael Winton

    Good afternoon
    we have paid off our mortgage and received this e Mail from a Notary:-

    Muy buenas tardes Michael.

    Mi nombre es Juanjo Sánchez, le escribo desde la Notaria de Torre Pacheco en Murcia.

    Con fecha 24/10/2018, se firmo una Cancelación de Hipoteca de Bankia a nombre de WINTON DEVELOPMENTS LIMITED.

    A fecha de hoy, esa escritura aún esta sin tramitar (sin sellar en hacienda, sin inscribir en el Registro de la Propiedad y sin abonar la factura de la Notaria).

    Quiere usted que le hagamos todo el tramite de la escritura de Cancelación de Hipoteca?

    Quedo a la espera de sus noticias.

    Un saludo y gracias.

    In subsequent e mails he asks for €500 which we find expensive and as we do not know him can you confirm this normal?

    • Amanda Thomas

      Dear Michael, This gentleman from the Notary explains that you have cancelled the mortgage with Bankia but the deed is not transmited, basically not registered in the Tax Office, not in the Land Registry or Notary basically. At some stage all these things have to be done, either now or when you sell. Usually a lawyer does it but a Notary can do it. That is about the usual price, often more. I hope this helps. If you find it difficult to deal with him because of the langauage please email us on enquiries@spanishsolutions.net as we also do this and explain it all in English.

  • Nick

    We have sold our house in Cataluña, and exchange contracts on 15th November. There is still approximateky 20,000 euros outstanding on the mortgage. How much will the Bank be lawfully allowed to charge us for paying the mortgage off please?

    • Nicola Ryan

      Good Morning Nick,

      It would be best to check the terms and conditions of your mortgage in order to confirm what the charge will be to paying off your mortgage, we hope this helps.

      Kind regards
      Nicola

  • Anthony Watkinson

    i lived on a small urb, in spain for 12 years and all have just got on the PGOU and have been told we now need to pay for the land consolidation.Should this have been when they were built?

    • Nicola Ryan

      Good Evening Anthony,

      Thank you for your enquiry,

      We understand you concern, we have passed this enquiry to our senior Solicitor for his comments, we will be in contact in due course. Should you have any further queries in the meantime, please do not hesitate to contact us.

      Kind regards
      Nicola

  • Mary

    Confused about the 175 euros costs, are you saying it covers the notary fees and cancellation at the land registry, my mortgage is paid and I have accepted an offer on the house, awaiting a notary date this month, please advise on my cancellation of the debt fees.

    • Nicola Ryan

      Good Morning Mary,

      Congratulations on the sale of your house.

      Yes, this is correct. When you have fully paid off your mort­gage the debt with the bank is ex­tin­guished. However, the entry of the mort­gage at the Land Re­gistry is not erased auto­mat­ic­ally. Your Solicitor can do this on your behalf or should you not have one Spanish Solutions would be delighted to help you.

      We look forward to hearing frm you.
      Kind regards
      Nicola

  • Sue Perry

    I have sold my house and the estate agents have received the money. There was a mortgage on the property that has expired with the bank. The estate agents won’t release the money to me until the mortgage has been cancelled at the notary and removed with land Registry. Is this normal practice as I’m left trying to organise this with my bank? The new owners are in the property. The estate agents have power of attorney and we’re happy to sign the sale forms at the notary on my behalf.

    • Nicola Ryan

      Good Morning Sue,

      Thank you for your enquiry.
      We can help you with this no problem.

      The estate agents are doing this to ensure there are no debts attached to the property, this is normal practice for any reputable estate agent or legal firm. They are protecting everyone involved by ensuring everything has been done done correctly.

      We will contact you directly to discuss this matter further.

      Kind regards
      Nicola

  • Jackie Ramscar

    Is it a difficult process selling your house which has a mortgage on it or can it still all be completed at the notary or is it delayed

    • Nicola Ryan

      Good morning Jackie,

      Thank you for your enquiry.

      No, this should not be difficult or delay the selling process in any way. We will contact you directly to find out, firstly, if you have a solicitor dealing with the sale on your behalf as he/she should deal with this as part of your completion. We look forward to speaking to you.

      Kind regards
      Nicola

  • Jean

    Hi I have paid off the mortgage and received the Hipoteco details from the solicitor to show I have paid off the mortgage. What about the actual deeds of the house am I not supposed to have then as well?

    • Amanda Thomas

      Dear Jean, That is great news. What a wonderful feeling that must be. Paying off the mortgage does not remove it from the deeds, this has to be done separately through the Notary, then Land Registry so that you then get a deed with the mortgage removed. We can help you with this and quote if you wish. With kind regards.

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