Paying a mortgage can become a real nightmare for many people who are facing tough economic times. Yet it can also open a door of hope for those in difficult situations.
The Bank of Spain explains a Code of Good Practice for families who struggle to meet their mortgage obligations. This resource identifies measures that banks may voluntarily adopt to help mortgage holders in adverse circumstances. If you are not aware of the existence of this code, below is an overview of what it consists of and the requirements to comply with it.
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What you need to benefit from the Code of Good Practice
Access to this resource requires having a bank with which the mortgage agreement is contracted that adheres to the code and meets other conditions, such as the loan being secured by a habitual residence and the property value not exceeding 300,000 euros. There are also economic requirements described in the section titled exclusions threshold.
Check if the bank complies with this rule
Not everyone who has mortgage debt and faces difficulties can benefit from the help contained in this law. If you find yourself in this situation and want to know if you can receive any of the support, the first step before starting more paperwork is to verify whether the bank from which the mortgage originates follows this rule. This verification matters because it determines eligibility for the available measures.
On the Bank of Spain’s website, you can consult a list of all banks that adhere to this rule. If your financial institution is on that list, you can proceed with the related processes.
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What does the aid consist of?
Once it is confirmed that the borrower’s bank is on the list of compliant institutions, the next step is to understand which benefits may apply, provided other necessary requirements are also met. The code’s mitigating measures include debt restructuring and options such as a haircut or a request for payment relief.
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Until when can you make a request?
The Code applies to mortgage loans contracted before December 31, 2022, and the deadline to claim relief has been extended to December 31, 2024. These timelines are essential for borrowers planning repayment adjustments or seeking reformulated payment schedules.