Warnings and recommendations of the Edict of Spain on the offers of “reunifying debts”
28.02.2006
SOURCE: Spanish Bank
A habitual example of debt consolidation
We add the loans that you have signed and join them in a Credit í nico. You will be able to pay less quota every month and have more money for your extraordinary expenses, only with the guarantee of your housing. So easy as to join all your loans in the only one. More money for less quota.
- It is habitual that an average family confronts, monthly, the payment of the quota of the mortgage of the house, that of the loan of the car, some personal loan, like that - like the debt for the balance dependent on the credit card, with which it is faced, throughout the month, numerous payments. The day agreed in the different contracts, the bank will load in the stated account the respective quota.
- In the last months announcements have proliferated in the means of offering to reunify all the debts and reduce the entire cost of the above mentioned financings.
- This debt reunification practice is not by no means novel. The banks, savings banks and credit cooperatives, for ages, before risks of non-payment or problems announced by his debtors to face to the fulfillment of his obligations, offer alternatives to his clients to modify the agreed payment conditions and to overcome a difficulty supervened at the time of satisfying his diverse payments.
- Nevertheless, the most novel of this practice, is that the advertizing offers of these reunifications are being realized, in most cases, by companies that are not banking institutions. In general, the work that these companies realize is that of intercoming up between the client and the banking institutions where the loans are had to cancel and with those who grant the financing.
- The formula usually consists of extending the existing mortgage loan or coordinates the new one, and with the new obtained funds to return prematurely the balances dependent on the rest of loans (personal, proceeding from the use of credit cards and, in case of a new mortgage loan, to cancel the previous one). This way - one happens to pay only one quota, instead of several as previously.
- On having usually been the interest rates of the mortgage loans minor than those of the personnels and those of the credits in card and, also, that the mortgage loans occur rarely they have a duration very superior to that of the personal loans, the quota to pay will be able to be lower than the sum of all the previous ones, although the term during which it will be necessary to be paying also will be top.
- It has to of be born in mind that these operations also have costs of procedure and formalization. This way - the early cancellation of the loans that are going to be replaced with the new one they will usually reckon in the contracts for the application of commissions or penalizations for the payment in advance and, in case of that they have mortgage guarantee, in addition to the above mentioned commissions or penalizations, a series of expenses (notarial, register them, to imposed and if it takes control of an agency, those of this one,). On the other hand, the hiring of a new mortgage loan, it will bear expenses (the previous ones, more a new appraisal) and commissions.
In the paragraph of this Portal referred to mortgage loans there is indicated by major detail the nature of these loans, the previous informations that the banking institutions, like that must give - like the commissions and expenses that they can support, being able to gain access also to the leaflets of tariffs of commissions of the entities for consular the maximum amounts that reckon to perceive for the different concepts.
- In case one comes to not bank company, the intermediation service will have a cost that, normally, will be in charge of the client, cost that will have to join the commissions that, as earlier have been mentioned, they could perceive the banking institutions in the cancellations and formalizations of operations, this way - how the expenses (notarial, register them, etc.) that they could have.
- By it, in order a suitable evaluation of the operation, there must be born in mind not only the difference of interest rates between the ancient loans that are replaced and the new one, but the term during which he goes to be paying and the entire expenses of the operation.
In any case it is suitable to request detailed information of all the costs that would bear the requested operation.
- To know if the one who realizes a debt reunification offer is a banking institution inscribed in the records of the Spanish Bank, from here - it can consult the relation of the entities inscribed in the above mentioned Records.
25 % of the mortgages will go on to hands of financial intermediaries in 2006
28.02.2006
The sector of the intermediation of the credit, well-known market like 'brokers' financiers, it will come up in 2006 in 25 % of the mortgage loans signed in Spain, according to information of the Agency Negotiator of Bank Products (ANB). This intermediation will suppose an increase of 50 % on 2005, when the business volume reached 350 million euros, eight times more than the registered number four years ago. At the end of the third trimester of 2005, the mortgage debt of the Spanish families was overcoming, for the first time, the trillion euros, in particular 1,075 trillions, number that has doubled in only four years and a half.
Certain financial products looked in Internet like: "reunifying debts“, “to consolidate debts” or “reunification of loans” they achieve that our mortgage goes on finally to intermediaries' hands.
It supposes for every Spanish an average carried away debt to the financial institutions near to 24.000 euros, codes that it might increase before deep temporary employees of the interest rates.
The strong increase of the financial intermediation owes to the supported demand of mortgages and to the possibilities of election between different products that these financial intermediaries offer, said the executive director of the ANPB, Luis Javaloyes.
The mortgages volume that this sector intermediate, along with the atomization that happens in the same one, makes a regulation of these companies precise, since they not all act with the due transparence, indicated.
The evolution of the real estate market, with slower growth rhythms, a stage of interest rates that has left the historical minimums, the strong irruption on the immigrants' market with stable labor situation and the good march of the Spanish economy there are the factors that are impelling the transformation of the mortgage market in Spain, affirmed Javaloyes, and there are factors that are propitiating the boiling of the sector of the financial 'brokers'.
Barclays Bank offers insured mortgages
24.02.2006
Barclays Bank and the insurance company Cardif, branch of BNP Paribas, have come to an agreement for which, the clients who formalize a mortgage with Barclays, from next Monday, the 20th of February, could sign the protection Insurance of Payments of Cardif.
The Insurance Barclays Protección of Payments, it guarantees the payment of monthly quotas across an insurance policy that it includes, both the unemployment (for wage earners), and the temporary incapability (for autonomous, officials and temporary workpeople). The insurance will be free in the forms of the only financed cousin and monthly cousin.
These guarantees take every day more importance inside the bank sector, since it even does relatively a little time, the insurances linked to the housing finance were covering only cases of death and permanent invalidity.
Source: elconfidencial.com
Alternatives to the Euribor in the mortgage loans
24.02.2006
Some movements begin in the sector. This way - Banesto gives to his clients an insurance of coverage that reduces the impact in the quotas if the Eurí-bor rises over a limit. Others, instead of this type of protection, bet for extending the credits up to 50 years. Between them, the BBK and the Labor Box. A practice that the Spanish Bank does not like too much.
The last step has given The Caixa, which last week presented an innovative mortgage. A contract in which the client decides what part of the entire total he is going to pay to fixed guy and which to variable type along the whole life of the contract. It would be desirable at that the number of mortgage operations slightly sensitive to the interest rate, the Catalan box aims in his last report on the real estate market.
They denounce that the CAM rounds the mortgages
24.02.2006
The banking users denounce the rounding to the rise that the Savings bank of the Mediterranean is carrying out in the mortgages constituted more than two years ago. The delegate in the Valencian Community of the Users' Association of Bank Services (Ausbanc), José Antonio Pérez, tells that in one mortgage loan type, when the result of the formula eurí-bor any more an interest rate is not round, what they do is to apply a quarter of point more, never of less. This way, the representative of the Users' Association of Banks, Boxes and Insurances, Vicente Bellido, points out that they obtain a few very high benefits, over the awaited thing.
Bellido emphasizes that, in many cases, the CAM is carrying the rounding out in substitutions, when the property development company of a housing penetrates the mortgage that contracted with the bank more than two years ago the buyer of the house. The Adicae representative emphasizes that in these cases, it would be necessary to understand that there has been a change in the mortgage and, therefore, to prohibit him the rounding.
Alternatives
Other one of the formulae who advises the representative of the users of banking to avoid to pay more to the banking is that of extending the capital.
source: elperiodicomediterraneo.com
The families owe 474.000 million Euros for his mortgages, 24,5 % more than one year ago
24.02.2006
The fortitude of the mortgage market reaches unknown levels. The interannual increase of 24,5 % to closing of 2005 is an unpublished valuation from 1990, date in which the INE began to prepare this statistics. Along the past exercise, the hearths hired credits at the price of 93.350 million euros. The comparison of the entire balance to closing of year (474.400 millions) with 253.552 millions with which 2002 finished they give a very real idea of the unstoppable career of the real estate market: in three years, the global volume has grown 87,1 %. This is, almost the double.
A panorama derived from the comfortable conditions of hiring of last years, with interest rates in historical minimums and a notable rhythm of increase of the apartments. This has led to the hearths to overcoming fully the recommended indebtedness level. This way - the average effort to acquire an apartment (the amount of the letters the first year in percentage of the available annual revenue) was located in 2005 in 36,5 % or, what is the same, more than three points over the considered as ‘limit‘ to begin suffering possible problems of payment.
The Spanish Bank one confirmed yesterday very bad news for those who should check his mortgages in the next 31 days: the increase of the euribor in January to 2,833 %. The highest level in three years and more of half a point (0,521 %) over that of January, 2005. In case of an annual update, and if the average mortgage cites as an example for the housing buy-144,352 euros, according to the National Institute of Statistics (INE) - the monthly letters would go on from 653,55 euros to 691,35 euros, with a rise for 37,8 euros that in one year would add 453,6 euros.
Addicted to the euribor
The problem does not finish there - since those who have his credit subject to a half-yearly review the sobrecoste will be even major. The increase rises up to 48,17 euros a month and up to 578,04 euros (96.177 pesetas) in the set of an exercise. The last messages of the governor of the European Central Bank (BCE), Jean Claude Trichet, who already raised the price of the money last December to 2,25 %, do not leave place to the doubt. This year there will be new types increases.
The Spanish Mortgage Association has remembered in the last months that the dependency of the euribor of the national credit system is excessive (eight of every ten loans cite it as an example), therefore he has asked the authorities to value the possibility of smoothing the current tax system.
The target is to facilitate the step of a contract from fixed type to variable or mixed other. The association warns that the most exposed to the increases types are who closed his mortgage in 2004 and 2005.
source: larioja.com
Do we owe to consider to hire a mortgage to fixed type?
23.02.2006
The euribor is plunged in an upward tendency that, probably, will spread in the next months. Before this increase, the mortgage loans to variable type can lose attraction.
The euribor, the reference index in eight of every ten granted mortgage loans, has risen in January up to 2,833 %, according to still provisional information. The mortgages that have been checked this month are already a little more expensive. And most likely they will keep on getting dearer in the following ones.
It still seems prompt to choose for this type of mortgages
The euribor has initiated a significant climb, which extends already for seven months. According to calculations of the Spanish Mortgage Association, a client with an average mortgage for 120.000 euros will have to pay approximately 350 euros per year from now on, with regard to January of the previous year. Before the upward tendency that the euribor presents, it seems necessary to analyze if there has come the hour of betting for the mortgages on fixed type. From the Spanish Mortgage Association (AHE) they think that the Spanish credit system has an excessive dependency of the euribor and they believe that it would be good that one will begin to encourage the loans hiring to fixed type. This is an interesting option, especially, for those more conservative clients, who do not want to have to adapt themselves to the swaying of the interest rates.
The variables are cheaper
At present, the mortgages to variable interest more sales of the market are indexed to the euribor and apply a differential of concerning 0,4 % (that is to say, they are located after the last review of the index in 3,233 %). This type of loans to variable type gathers both the increases and the descents of the interest rates.
For his part, on the market at present loans can be to an average fixed type of 4,5 % (it is the case of entities â~on-line†™ like Ibanesto or One e). This type of loans does not allow to fixed type to benefit from the descents of the interest rates, but yes - they avoid the increases.
Normally the loans usually have to fixed interest a shorter pay-off period and a nominal interest rate higher than the variable loans. That's why, also the monthly amortization quota usually turns out to be higher in the mortgages to fixed interest. On the market, the entities usually offer loans to fixed interest in a maximum term of 20 years, of average, while the mortgages to variable interest can be hired up to 50 years (with BBK or Labor Box).
From BBVA they make sure that to choose between variable or fixed mortgage is a personal decision that depends on the preferences and the situation of each one. â~Si the client prefers the forecast and does not wish the quotas to change, we recommend a mortgage to guy fijo†™, they affirm.
In any case, since the tendency that has been imposed on the market in the last years is to hire mortgages to variable interest, Gregorio Mayayo, president of the AHE, recommends to bear in mind the future evolution that there can register the indexes to which they are indexed. â~Cuando a loan is hired to variable interest rate it is not necessary to calculate the possibilities of amortization according to the initial interest rate, but to the most probable type in futuro†™, makes sure Mayayo. For a mortgage to 20 years, it would be necessary to think about an average interest of 6 %.
The intermediate option
It is good to analyze the big variety of products that exist on the market and his peculiar features. â~Hay products that incorporate a roof into the interest rates changes.
Others allow to change the quota into term or incorporate lack periods. The best advice that can be given to a family is that he evaluates carefully these characteristics and chooses what better him convenga†™, he adds.
Source: The Provinces Digitalis
The Spanish Bank repeats notices and warnings on the mortgages in very long term
23.02.2006
After the announcement of a banking institution of the authorization of mortgage credits with a pay-off period to 50 years or, more recent, the personal credit that pays the interests instead of receiving them, faced to the payment of the expenses of constitution of a mortgage, between many other products that are little less that revolutionizing the mortgage market, the Spanish Bank has gone out again to the forum to recommend prudence.
The general manager of Supervision of this entity, Pedro Pablo Villasante, has claimed to the financial sector the establishment of more demanding criteria at the time of granting mortgage credits, insisting on the warnings that for time it takes throwing the Spanish Bank. This way - Villasante remembered the following points:
A prudent politics in the credit authorization with mortgage guarantee must be based on the return guarantee, for what it is necessary to value the amount of the granted credit and the safety grade of the familiar income.
The entities must do the advice function on the financial effort that the families can do in an extensive time period.
Before an unpaid temporary employee of the credit, the guarantee, that is to say, the value of the apartment, it must offer enough defense margin, bearing in mind the possible adverse evolution of the prices in so wide period.
Realistic politics must be adopted at the time of fixing maximum amounts of credit granted, based on rigorous and demanding appraisals. The limit of 80 % of the value of appraisal as quantity of the loan can be born in mind like a reference of special interest, opposite to 100 % that every time offer more entities.
For not traditional mortgages, there must be born in mind more demanding ratios, like those of longer period or with important lack periods, he gathers Servimedia.
On the other hand, the Spanish Mortgage Association thinks that the elevation of the interest rates in Europe this year will not provoke any sudden stagnation of the Spanish mortgage market.
The general manager of Financial Supervision of the Spanish Bank, Pedro Pablo Villasante, repeated yesterday the notices that the issuing institute has come throwing to the entities on the new mortgage offers, those that spread to very long period - up to 50 years, like the recent offers of Labor Box and the BBK - they propose to extend the coverage of the mortgage to finance other procurement-vehí-culos, domestic equipment - and those that raise several years of lack in the initial stage of the credit. Villasante told that the most reasonable limit in a loan for the housing buy is 80 % of his value of appraisal, conscious of that is a practice generalized on the market the authorization of 100 %. Also he argued that banks, boxes and credit cooperatives have to analyze carefully the situation of the claimant of a mortgage, his current salary and his perspectives of future.
Source: larioja.com and the mundo.es
Labor box helps the BBK and incorporates into his scale of mortgages a loan into a pay-off period of up to 50 years
06.02.2006
It is a question of the entity second in offering such a long term on the Spanish market, and the first one in Gipuzkoa
This product speaks exclusively to 35-year-old minors. According to the calculations of the box integrated to Cooperative Mondragón Corporación (MCC), a loan for 130.000 euros to 50 years supposes a reduction of 22,5 % in the monthly quota with regard to the same credit to 30 years. In particular, the client would happen of paying 565,77 euros a month to 438,65. That himself - it will be late 20 more years in canceling his debt.
The new mortgage joins the offer that already has the box with different facility according to the profile of the client. This way - it has flexible loans as for day and quantities of payment, a mortgage siin interests during the first six months, a mixed credit that brings together fixed and variable interest, or the increasing mortgage in which the quotas increase to the same rhythm as the salaries.
The slowness of the mortgages grows
04.02.2006
The slowness of the mortgage loans for housing acquisition rose in September, 2005 up to 0,401 % from 0,394 % registered in June, according to information of the Spanish Mortgage Association (AHE). The boxes supported in the above mentioned month a ratio of mortgage dudosidad of 0,388 %, over that of the banks, which was located in 0,349 %.
In any case, the valuation of doubtful of the mortgage credit keeps on behaving, in general, from a form more positive than that of the whole of the credit to the resident private sector. In particular, the slowness of the whole credit was located until September, 2005 in 0,819 %, lightly top at the registered level three months earlier, which was 0,812 %.
As it happens in the mortgage ones, the boxes present worse ratios of dudosidad than the banks in the set of the loans. This way - the first ones had catalogued 0,762 % of his value as of doubtful cashing, opposite to 0,710 % of the second ones.
The AHE adds that this information is the first ones prepared under the new countable norms of the introduced Spanish credit companies last June for the Spanish Bank, which they have affected to the previous series, what makes the comparisons difficult.
The new regulation classifies like doubtful the whole amount of the debt in operations that they take some defeated amount as principal, interests or agreed expenses contractualmente, with more than three months of antigí¼edad (bad debts) or when the classified balances as doubtful they are superior to 25 % of the amounts dependent on cashing. Thus it eliminates the ancient rule of dragging for operation with six months or a year of non-payment, depending on the type of borrower and purpose of the credit.
Source: consumer.es
