Extension of Spanish mortgage due to COVID-19 crisis | Áurea Inmobiliaria – Real Estate Agency in Los Alcazares
Extension of Spanish mortgage due to COVID-19 crisis
Many of you are asking us about the extension of Spanish mortgage due to the COVID-19 crisis.
In this blog we are going to sum up in which cases the extension can be applied. We also talked about periods and requirements in order to try to solve your doubts.
This issue is located in the Spanish Royal Decree 8/2020, from the 7th to the 16th articles. There are also some extensions, like in the Spanish Royal Decree 11/2020.
Requirements for extension of Spanish mortgage due to the COVID-19 crisis
The requirements to ask for the extension of the Spanish mortgage are the following:
- Purchase of the first home
- Properties affected by the economic activity developed by business owners.
- Properties that are rented by third parties
The extension will be applied, by request, to those cases that have economic difficulties to pay due to the COVID-19 crisis.
In the 2 first cases it will be applied when the debtor has all the requirements of the 16th article of the Spanish Royal Decree 11/2020.
In case of guarantor of the main debtor, the same measue will be applied to their usual home
- The debtor is unemployed or, if the debtor is freelance, has a great loss of income.
- When the total amount of income of the family is not more than the following steps in the month before:
- With a general exten, the limit of 3 times of the IPREM – the Spanish official index which guages a basic level of income.
- For every kid and/or senior more than 65 years old the IPREM will be increased 0.1.
- In case of a member of the family with more than 33% disability, dependent or with an incapacitating disease, the limit will be 4 times of the IPREM.
- The mortgage fees plus basic suppliers are more or the same as the 35% of the total income of the whole family.
- That, for the health crisis, the family has suffered an alteration of the economic circumstances – when the mortgage value has been increased at least 1,3 or when there is a big loss of sale, at least 40%.
Paperwork that needs to be given to the bank
- In case of unemployement, a certificated by the company must be given.
- In case of cease of activity by the freelance a certificate issued by the AEAT – Tax Administration National Agency.
- In order to prove the number of people that live in the property: family record book, legal registration certificate and incapacity certificate, in case there is one.
- Ownership of the properties: land registry certificate and public deeds.
- Sworn statement of the debtor saying that they have all requirements not to have enough economic resources.
Once that the extension has been applied, it must be resolved within 15 days. A public deed is needed and it must be registered by the Land Registry. The expenses will be paid by the bank and it will be done once that the crisis finishes. However, the effects of the extension will be applied within 15 days after the request.
Once applied, the mortgage debt will be stopped for three months, and it can be extended by the Spanish Cabinet. In this time the bank cannot ask for the payment of the mortgage debts nor interests.
We hope we resolved your doubts. Although we are not working at the office, you can call us or send us an email. We are here to help you.
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