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Remortgaging and refinancing in Spain

After putting up for years with a bad mortgage deal I have finally researched the market and made the move. I've waved goodbye to one spanish bank and went to a better one. I'll be blogging my 2p worth of knowledge I got from the experience.

Life insurance attached to mortgage
Tuesday, February 22, 2011 @ 8:47 PM

Very often banks attach conditions to their mortgages, for example your account has to be a "nomina" account, or you need to buy one investment/pension product with them etc. Invariably, they also require you take out their life insurance. I'm guessing the commissions they make out of that warrant the pressure they give their clients.... but it might not be all negative. Bear in mind these 2 points that I personally was not aware before:

Ask your bank if they can include the life insurance cost as a one-off payment and merge it into the refinancing amount. It does not count as an increase of the hipoteca, i.e. it qualifies for subrogacion. (Normally you cannot subrogar and increase the amount, but including periferal costs is ok). Very often this will result in substantial savings too because you are paying ahead of time the whole insurance premium - I had a 60% saving over my existing monthly-payments life insurance.

If you are a couple and the mortgage is to be on both your names, check the weighting of the mortgage amount. Men usually pay much much much higher premiums - we are just made of weaker material obviously! So instead of the obvious 50% of the mortgage payable on the man's death and 50% on the woman's, investigate if the bank can put 75% on the woman because that might save you a decent amount of money.

Next post, we put some numbers out comparing real spanish banks mortgages.

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Karen said:
Wednesday, February 23, 2011 @ 9:09 AM

We have a mortgage with seperate life insurance. The cost for my husband is about the same as we would pay in the UK, mine however is twice as much - nearly 90 euros per month. We have tried many times to cancel, but the bank reinstates the direct debits. The companies involved refuse to speak to us in English and we have never had any documentation! Now on to mortgage provider to try to cancel etc - been going on for 4 years.

mortgagee said:
Wednesday, February 23, 2011 @ 2:24 PM

Interesting case Karen - I am surprised to hear that your payments are higher than your husband's. It goes to show I guess that you can't but shop around for these things.

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