liam keating

Hello I am new to this so forgive Me if I break or bend some rules On this posting.My Question Is Simple really has anyone else tried to do a Mortgage Transfer From La Caixa to a Bank in Spain only to be told as I was that the contract I have with the Caixa does not allow You to Transfer a Hipoteca Abierto.That this mortgage is designed by La Caixa to make it nontransferable.That the only way to get out of it is to pay them the Fees for cancellation..
I have spoken to a clerk of the European Court and they think that this is Illegal under European law but is perfectly accepable under Spanish law..
Am I alone in this?? Thanks Liam

greg

Hi Liam, I've moved your post to a new thread to ensure you get the best response.

I'm not able to give you an answer but sure one of our members will.

Best of luck!

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Rose FP

Good day La Caixa.

I presume that you are looking to transfer your mortgage to obtain better terms i.e. lower payments.

That being so, you will not be alone in the understanding of the process and what your options might be.

The reality is that you have executed a contract with the bank and there are obligations placed on both parties within the terms. That will not entitle you to an automatic transfer to another lender. Rather you will need to repay the debt and, of course, replace the contract with another with the bank assuming the mortgage.

And, frankly, if this is breach of EU Laws I would be stunned; it is basic contract law and Spain will not be alone in the Notary process that it uses for such matters.

The process then is a 'Remortgage'; that is a switch to another lender, subject to full underwriting and conditions, that suit both you and that lender. Be mindful that lending now is far tougher than it was and, in particular following the demise of property valuations and more restrictive % mortgages on offer, it is not a 'done deal'.

AND there will be significant costs involved, circa 5-6% of the mortgage sum!

If you need a personal response looking at your individual circumstances, then PM me.

I hope that helps a little!

Mark Mountney
Rose FP

AndyinTenerife

This is a common problem unfortunately. I have had a load of remortgage enquiries from La Caixa clients.
They are all on pretty high rates and La Caixa´s rate review uses the Euribor from two months previous to the review date.
Their "Hipoteca Abierta" or "Open Mortgage" product cannot be subrogated to another lender and needs to be canceled. It is usually not financially viable to do this as the costs are in the region of 4 to 5%.

Subrogation or subrogacion lets you switch to another lender without the huge costs.

The terms of subrogation state that the new mortgage you transfer to must offer an improvement upon your current mortgage terms and also offer the same features.
Because the Hipoteca Abierta is unlike most other mortgages - the other banks cannot match its special features which is what makes subrogating impossible.

One huge problem I foresee is for those who buy now with mortgages such as these. A lot of banks are increasing their rates from an average of Euribor+1% to Euribor+2% and higher.
Solbank are now at 1.75% above and Leeds are in the process of increasing theirs.

If you took a Hipoteca Abierta with La Caixa and the rate was Euribor+2% or more - imagine what could happen if and when the Euribor begins to rise again - it went as high as 5.5% last year. If these mortgage customers were stuck on huge rates they would not even have the option to switch lenders - scary thought and something to consider if you are taking a purchase mortgage this year.

AndyinTenerife

If you go to a broker, ensure you don´t pay any upfront fees and that any broker fee is only paid if you actually get to completion.

For anyone interested in remortgaging at the moment, the max achievable is currently 65% of valuation. So if you bought with an 80% mortgage last year you are probably out of luck.

You can switch to full term interest only at 65%. Maximum age is 80 years.
Check your review date first though. If your mortgage rate is going to drop in 2 months time or so then it might worthwhile waiting to see what your new rate and payments are are going to be before you look into switching lenders.