How to sell an apartment that is guaranteed
According to the General Council of Notaries, in June 2018 there were record figures (not seen since 2012), in terms of the sale of homes and the granting of mortgages. And it is that the mortgage loan is the preferred instrument when financing the acquisition of a property.
On many occasions, being the applicant a young person, a worker with reduced payroll or a person without a permanent job, the need of the buyer arises to obtain financial support that guarantees the full payment of the loan. This support is granted under the figure of the guarantor.
If you are thinking of being a guarantor in the purchase of a relative’s home, or you have already signed as a guarantor, you may have doubts in relation to whether an apartment can be sold if it is guaranteed. Don’t worry, in this article, from Sky Marketing we clarify your doubts.
Differences between endorsement with personal guarantee or limited guarantee
To know if an apartment can be sold if it is guaranteed, you must first know if the guarantee has a personal or limited guarantee.
If a person signs as guarantor, he will respond with the equity he owns and with what he may acquire in the future to the debt contracted by the mortgage holder. In this case, the guarantor offers a personal guarantee. In this figure it means that you would respond to the possible default of the mortgage debtor with all or any of the assets that make up your estate. That is, if you are a guarantor, there is no specific asset as a guarantee of payment, so you can freely sell your apartment.
There is the possibility of supporting the purchase of another home by offering a real guarantee and not a personal guarantee. In this case, a specific asset can be offered as a pledge or guarantee of the loan. In this way, only one asset is risked and not all the existing assets, this is called limited liability. In this case, the owner of the property used as collateral can also sell his house with a mortgage, but as an obligation weighs on him, if someone wanted to buy the house, he would have to do so with that burden. That would be specified in the Property Registry.
What rights does the guarantor have?
When the guarantor signs a surety, he will generally believe that he is signing a commitment that he will have to respond in the event of non-payment by the principal debtor. It is to be observed if the guarantee that is signed under the figure of joint guarantee , since being joint guarantor implies that he renounces the benefits of exclusion, division and order. This means that it is not a simple guarantor, but that it becomes a true debtor with the same obligation as the main debtor.
With these clauses, the bank makes the guarantor renounce a right that he has, imposing, without any type of negotiation, that the guarantor renounce to exercise all of his rights.
If there has been a lack of adequate and pertinent information on the waiver of rights included in the clause, this is an abusive clause. The consequence of achieving the nullity of the mortgage guarantee in court is that the guarantors disappear from the mortgage contract, ceasing their obligations to the bank.
What options does the mortgage debtor have who cannot pay his payments?
Today, banks are more willing to negotiate with their customers. If the principal debtor is in a situation of non-payment of the installments of his mortgage, it is possible to take several actions before allowing the bank to act against the guarantor. They are between them:
Decrease your fee with grace
This means that the entity would allow you to pay for the agreed period, exclusively the interest on the loan. You would stop amortizing the capital and the amount of the bank would not go down.
Interest rate reduction
The entity grants you the reduction of the interest rate, extending the term. The period in which it occurs is approximately 40 years.
Removes her from debt
This case of debt relief is rare. It consists of getting a reduction if the payment of your mortgage payment represents more than 60% of your income. In these cases, the creditor is allowed to sell the apartment for the market price and pay off his debt. To obtain the removal you must have previously applied the three possible solutions above.
The dation in payment
Suppose you have tried the above scenarios without success.
It involves changing your debt for another bank. Being able to re-negotiate all the previous options in case they have not been successful.
At Sky Marketing, we can advise and technically accompany you if you find yourself in a guarantor situation, both to know your options of whether a flat can be sold if it is guaranteed and to stop being a mortgage guarantor.