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Bank mergers: why should you cancel the mortgage in the Registry if it has already been paid?

Monday, March 29, 2021 – 12:30

The bank mergers that are taking place can create certain doubts about how they will affect the clients of both entities, for example, in what affects mortgages if they have already been liquidated.

The merger between different banking entities has occurred in recent times.

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Bank mergers in Spain are the order of the day. Caixabank and Bankia are in the process of merging and Liberbank and Unicaja are waiting their boards of directors decide on the terms of the takeover later this month. It is natural for the customers of these banks to wonder how these changes will affect them. For instance, What happens if you have a fully paid mortgage in one of these entities, but it has not been canceled in the registry? From the financial comparator they explain why it is important to do the procedure to cancel the mortgage as soon as possible.

Avoid future problems

Despite the mergers, the essential terms of the mortgages contracted will be maintained and if the last installment has already been paid, this debt will appear as settled for the new entity bank or for the absorbing company.

Nevertheless, It is possible that after mergers and, especially, with the passage of time, the execution of the mortgage registration cancellation may be complicated or delayed. It must be borne in mind that this is nothing more than a bureaucratic procedure and certain documentation from the bank will be needed to be able to register the cancellation in the Property Registry, they explain from

For example, the bank has to issue the zero debt certificate, which is the one that shows that the debt is fully paid and merger processes can lead to the closure of many offices, which would make it difficult to obtain this document. In this case, the client will be assigned a new branch, but the new offices may take time to have their databases updated with the information of the absorbed bank, so the process may take longer than necessary.

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For this reason, It is advisable to register the mortgage before the mergers become fully effective. You have to consider that if at any time you want to sell the house, it has to appear totally free of charges in the Registry. In fact, this is the main reason a mortgage is canceled: to sell the property.

Forecasting also saves money

It is common for many people to finish paying their mortgages and not go through the process of canceling it in the Registry, since this procedure has an associated cost. The most expensive way to do it is with our bank or with the buyer’s bank if you want to sell the house. In the case of the merged entities, if the procedure is carried out now before selling the apartment, not only are the problems of slowness of the process avoided, but money can also be saved, since the matter can be resolved through an agency independent or self-employed.

Banks tend to ask for very large provisions of funds to deal with theexpenses of the mortgage cancellation process (Notary and Registry) and, in addition, they have considerable fees, which make the total cost of doing it with an entity can amount to about 1,100 euros (taking as an example a mortgage whose original amount is of 150,000 euros).

On the other hand, an independent agency, that is, one that does not collaborate with a bank, can ask for less money to cover the expenses of the process and has more adjusted fees, so it can get to charge about 500 euros for the entire process. This means aSavings of about 600 euros for canceling the mortgage, compared to what a bank would charge, be it the one that merges or that of the buyer (following the example of an original mortgage of 150,000 euros).

The client can also choose to do the process on their own, but, in that case, the person has to take full charge of the procedures and, in addition, you will not be able to avoid the expenses of the Notary and Registry. Thus, you could have to pay about 400 euros to cancel the mortgage without professional help. That is, just about 100 euros less than what you would pay an independent manager, but about 700 euros less than what you would pay a bank.

Keep in mind that if the cancellation of the mortgage is left for when you want to sell the apartment, the buyer’s bank will require that the process be done with their agency, as they will want to make sure the load is lifted about housing. However, this will also face the problems of slowness that the merged bank could suffer, so that in addition to paying more for it, it may take longer than necessary to have the house free of charges.

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