Although today access to mortgage loans is very limited, years ago
they were achievable for many families
who are currently very close to paying off their homes.
When the last mortgage payment is reached or an early repayment is made, the question is: "What now?"
The truth is that
the mortgage does not end with the payment of the last installment
.
It is true that
nothing is owed to the financial institution
anymore, but according to the house report issued by the Property Registry, the mortgage is still settled, and this may cause erroneous information in the future.
Currently, many families that years ago accessed mortgage loans are about to finish paying off their houses.
Photo: Pexels.
Mortgage: what is it and what are the rights and obligations of both parties?
The mortgage is a guarantee that the owner of one or more properties grants to a third party (which can be an individual or a bank) to
protect the fulfillment of a debt
, as detailed on the page of the College of Notaries of the City of Buenos Aires
.
In this way, the
property remains in the possession of the owner
and, in the event of non-payment, the creditor is granted the right to collect his credit by executing the property.
Meanwhile, the mortgage is a
guarantee that the debtor gives
before the possible breach
of the obligations assumed
in another contract (for example, a money loan).
And it is only valid if it is constituted by
public deed
.
The Civil and Commercial Code requires that the property, the creditor and the debtor, and the debt that is guaranteed be identified.
The mortgage
covers the capital owed and the interest
after its constitution, and also the damages and subsequent costs caused by the breach.
The debtor must understand the term of the credit, the amount, the method of payment and the interest, and everything must respond to the agreement.
Doubts may be resolved by the authorizing notary, who will also read and explain the content of the deed fully and clearly.
The mortgage is a guarantee given by the debtor in the event of a possible breach of the obligations assumed.
Photo: File
What procedures must be done after canceling a mortgage?
After
paying the last installment of the mortgage loan
, as explained to
Clarín
by the president of the Tariff Commission of the College of Notaries of CABA, María Celeste Gerarduzzi, "
the bank must be required to sign the cancellation of the mortgage
. Normally
a Notary public
of the entity, who once the mortgage cancellation deed has been drawn up, will contact the bank to sign it".
"The cancellation of the mortgage is a
receipt
where the creditor (the bank or an individual) declares that
nothing is owed anymore
and asks that the mortgage be cancelled," Gerarduzzi explained.
Then, this deed is
registered in the Property Registry
so that it is free of encumbrances.
Meanwhile, the professional added that the mortgaged property
never ceases to be in the name of the debtor
, it only has an "annotation" that realizes that money is owed to a creditor.
"This means that
if it has to be sold
,
the mortgage will have to be canceled first
," she specified.
The process of
signing the deed of cancellation
will depend on when the bank representative signs before the notary public.
The subsequent notation of the cancellation, (process that the notary public will do)
takes approximately one month
.
In this context, the notary stressed that "it is very important that when canceling payments,
the return of the property title to the property is required
because it is common for the creditor to retain it."
To make sure that everything has been done correctly, you can also
request a simple note from the land registry
, although this procedure is not essential.
Once the loan is paid off, the bank must be required to sign the cancellation of the mortgage.
Photo Shutterstock.
How much do I have to pay for the property to remain in my name?
The costs (estimates) are:
Writing rights
($2,400)
Fixed notarial contributions
($1,400)
Fojas
($1,600, elaborated foja $6,000)
Registration fee
(between $2,500 and $3,000)
Tax forms
($12,000)
Fixed Rate
Mortgage Payoff ($1,500)
"The cancellation of real rights, that is, of the mortgage, has a
minimum
fee of
$35,000
plus
0.3%
on
the value of the loan
that, if it was in dollars, is applied to the current value on the date of the deed" Gerarduzzi said.
What happens if I finish paying the mortgage and do not do any paperwork?
The
disadvantages
are mainly that in the face of any operation that the person wants to do with the property,
the information will still be there
.
For example, if you want to sell the property, it will not appear to the buyer that the house is
free of charges
when you request the information from the Land Registry.
It will also be a problem if you ever decide to take out another mortgage on the same home.
LN
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