What can go wrong after mortgage in principle?

Object of the mortgage

For example, if after 12 months the sum of the monthly mortgage payments amounts to 5,000 euros, the IRPF deduction would be 750 euros. The taxpayer would have to amortize another 4,040 euros to obtain the maximum tax award.

In short, the cheaper a loan is, the lower the incentive to amortize early. In iAhorro argue instead that “taking advantage of the negative Euribor can be a good option to reduce debt and better cope with the possible normalization of money in the future, when the mortgage rate rises again”. The financial portal points out, however, that “given the current situation of low interest rates, several factors must be taken into account when choosing the amortization option, in addition to the personal circumstances of each individual”.

Why is a mortgage a real right?

The mortgage is a right in rem because it is on the property and not on the person, which allows the creditor to pursue the property even if it is in the hands of a person other than the debtor, and for this reason it is possible to sell a mortgaged property.

When is it worth amortizing a mortgage?

On the other hand, from a financial point of view, if extra money is available it is only worthwhile to amortize the mortgage as long as the return on an investment is lower than the cost of financing. … The higher the cost of financing, the more profitable it will be to amortize.

What happens to the right of ownership over the mortgaged property, who exercises it?

The debtor owner of the mortgaged property retains the exercise of all the powers inherent to the right of ownership; but may not, to the detriment of the rights of the mortgagee, exercise any act of material or legal dispossession, which directly has the effect of decreasing the value of the mortgaged property.

Types of mortgages in Colombia

These considerations, together with the need to adopt, on occasions, solutions imposed by practice and technique, make it necessary to explain and justify the development given in the Law to chattel mortgages and nonpossessory pledges.

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On the other hand, the importance acquired by movable things at the momentum of modern industrial development and the appearance of new goods in the legal sense, difficult to classify among movable or immovable things, led to think of the so-called nonpossessory pledge and chattel mortgage, as a means of making viable the security interest for these goods, which because of their value or their nature adapted with difficulty to the classic models.

In the first place, neither in theory nor in practice did it solve anything to follow the fiction of the Ship Mortgage Law of considering movable property as immovable by nature, for the sole purpose of making it possible to mortgage it. In the present state of legal science, it has been deemed unnecessary to resort to this fiction.

How can the mortgage be in law?

Characteristics: The mortgage is a real right that does not imply dispossession of the debtor. The mortgage is an accessory right in rem, but distinct from the secured credit. The mortgage affects only real estate, which confers it the character of a real property right.

What is a mortgage right in rem?

The mortgage is a real right of guarantee and realization of value, which is constituted to ensure the fulfillment of an obligation (usually the payment of a credit or loan) on a real estate property, which although encumbered, remains in the possession of its owner, and the mortgagee may, in the event that the …

When a house is mortgaged can it be repossessed?

The only cases in which a property catalogued as a family home can be seized is if the lien or mortgage existed prior to the registration of the property under this figure, and if the mortgage was made for the purpose of acquiring, building or improving the home.

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Mortgage contract civil code

If you are thinking about buying a new home or refinancing your current home, it is imperative that you understand all the terms of your loan before you sign. Keep in mind that once you do, you will be committing to the terms stated, regardless of any errors in the documents.

Like all mortgage forms, reviewing the Closing Disclosure can be overwhelming, especially if you’re not sure what to look for. Instead of glossing over what you don’t understand, read this article to find out everything that’s included on the form. That way, you won’t have any doubts when you have to sign.

The Settlement Statement is a five-page form that lists, in detail, the key aspects of your mortgage loan, including the purchase price, loan fees, interest rate, real estate taxes, closing costs and other expenses.  It is important to review it thoroughly; in fact, it is one of the most important steps in the home buying process.

What happens if I don’t pay the mortgage on a house?

When the mortgage cannot be paid within the terms and amounts established when applying for the mortgage loan, the bank may begin to charge penal interest according to the conditions agreed in the mortgage loan deed, which are normally set at the maximum conventional rate.

What happens if I can no longer pay a mortgage loan?

In the words of Esses, the consequences of defaulting on a mortgage loan usually end in a foreclosure and auction process by the bank unless the debt is paid in full plus interest in arrears, the bank will initiate foreclosure proceedings.

What is more convenient to reduce installment or term?

Reduce installment or term

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By reducing the amount of the installment, the monthly payments will be more comfortable. … By reducing the term, the number of installments to be paid on the loan is reduced and, in addition, greater profitability is ensured by paying less interest than if the installment were reduced.

Extinguishing the mortgage

On the other hand, from a financial point of view, if extra money is available, it is only worthwhile to amortize the mortgage as long as the profitability of an investment is lower than the cost of financing. In other words, if the interest on the loan is higher than the profitability of opting for an investment. Currently, interest rates are at historic lows and the Euribor (the reference rate for most variable mortgages) is hovering around negative records of 0.5%. At the financial level, it is advisable to wait for higher rates if the aim of the mortgage amortization is to save more interest. As the cost of financing increases, it will be more profitable to amortize.

Depending on whether the mortgage has a fixed or variable rate, cancelling it in a period shorter than that established in the contract entails the payment of a commission, with maximums fixed by law. This expense is considered a kind of penalty for returning the money early, since it implies a change in the mortgage contract.