On many occasions, we have seen the need to apply for a mortgage loan regardless of the reason that is involved but the reality is that at that precise moment we have a debt to pay. And in which we guarantee our house, our car, etc. But once the stipulated term to pay said debt has expired, we proceed to the mortgage cancellation, this phase consisting in recording in the sole registry of the property that the mortgage credit in our name has been honored satisfactorily for both parts.
Both we and the bank have already established that there is no problem whatsoever and that everything is solvent because we already fulfill our obligations.
Canceling the mortgage is mandatory as well as necessary so that we can be the objects of a new loan and above all to maintain our unimpeachable credit record which is very important at present.
Arrears and arrears of a mortgage
We objectively carry out the cancellation of our mortgage when we complete the installment payment schedule granted by the bank, since regardless of whether we suffer a delay in our payment system or not, we have to pay our mortgage on time and form because we have a guarantee as a guarantee that we do not want to lose in any way.
Remember that banks are inclement, they do not expect or forgive and they are only interested in recovering the capital they invested with the figure of a mortgage credit adding their revenues that is the gain on their investment capital.
After all it is the nature of capital, its formula of capital plus interests is equal to profit, with what you can give an idea of how little they are interested in collecting the debt with what you have mortgaged, in order to recover your money, so it is very important to know how to make a mortgage cancellation.
Financial laws that govern mortgages in different countries
Depending on the financial laws of each country there are some ways to cancel a mortgage. It’s starting with the most common; when we pay the last installment agreed between us as debtors and the bank as a provider of a good. In this case, your money in our hands.
With this process, we cancel our mortgage because it is the moment in which we separated from the bank so to speak in terms of our monetary obligations to keep the installment payments plan up to date and so the bank recovers its capital with its interests.
So we record that they both the bank and we are satisfied with the results obtained of course that everyone focuses from their perspectives, but the most important thing is that there is no more debt and we are clean credit talking.
Ways to make a mortgage cancellation
The other way that exists or that we have as a measure to cancel a mortgage is when for one reason or another we get our hands a considerable amount of money product of an inheritance, the sale of some property or why we beat the lottery, then it is a good idea to cancel the mortgage.
But do not think you’re going to go the easy way since banks always have their own credit policies where this type of mortgage cancellation is stipulated, so how can you end up paying with an interest discount rate can you end up paying a penalty for pay earlier than planned.
This is very important because this cancellation was not included in the contract you signed with the bank, but this changes due to the credit policies that each bank has for its clients, but what you are interested in is that whatever you have the opportunity to get out of debt with them.
Other ways to know how to make a mortgage cancellation
On the other hand, you can also cancel the mortgage when you have the opportunity to sell your house, which is incidentally the most frequent way that customers have to cancel their obligation to the bank, but in this process is another roll.
Because you have to get the bank to deliver as soon as possible the settlement of the commitment that you acquired with them and that way you can leave your home unencumbered, because you should know that for a moment you should think like a client and if you are going to buy a property the first thing you want to know is if it is free of banking or legal commitments.
Also, the one who intends to buy your house will act in the same way since consequently, it will also have the same concerns that you would have when making a transaction of that nature so it is normal that these things happen.
You can also cancel a mortgage, when you try to ask for a new mortgage loan, so you buy a new property and you always leave the same in guarantee, for the peace of the bank.
But just as in the other ways, the property has to be free of encumbrance and it cannot be pledged in any way. So the bank is going to demand that we present the mortgage cancellation in the single property registry as a requirement to qualify for a new mortgage loan.
Sanctions of some financial entities
Otherwise and according to the credit policies that the bank has at that moment, we will not be subject to credit, in any way possible.
Because that’s the way it is that they, as a bank, consider that their money is not at risk, which in the end is part of what interests them.
And finally we have the option to cancel our mortgage requesting improvements in the conditions we already have or simply requesting an over mortgage or another mortgage on which we already have what leads us to have a double debt with the bank with the proviso that finishing paying for one another with the other to say it in some way, but in some cases this type of negotiation results in higher costs than the previous ones because you have to pay what banks call penance.