COVID-19, Can’t pay your mortgage?

You can’t pay your mortgage?

As a consequence of the COVID-19 crisis, the Government has established extraordinary measures to support those who have difficulties to pay their mortgage loan for the purchase of their main house.

So, the possibility has been provided of requesting a moratorium on the payment of the mortgage debt and suspending its collection without application of default interest when the debtor is in a vulnerable economic situation.

Who could apply for the mortgage debt moratorium?

1. Those who have become unemployed due to the crisis caused by COVID-19
2. Entrepreneurs and professionals who are suffering a substantial loss of income or a drop in sales of at least 40%.

Requirements

What requirements must you meet to apply for the mortgage debt moratorium?

1. That the family income does not exceed the triple of the IPREM in the month prior to the application. This limit will be increased for each dependent child; for each person over 65 years of age and disabled members or in a situation of dependency or incapacity to work.
2. That the mortgage payment, plus basic expenses and utilities, is higher or equal to 35% of the net income of the family unit.
3. That the percentage of mortgage financial effort covered by the family income has been increased by at least 1.3.

How to apply

The debtor must prove to the creditor that the required conditions are met. The following documents will be required:

• Unemployment certificate
• Self employment certificate that proves that the activity has been stopped.
• Family book (if the children have been born in the UK you will not have this document so a birth certificate will do)
• Padron certificate for all the members who live in the house.
• Disabled, dependency or inability to work certificate
• Title Deeds or extract from the land registry (Nota Simple)
• Debtors responsible declaration or “declaration responsible” stating that all facts detailed in the request and all documents provided are true.

How long do you have to apply?

from the 18th of March 2020 until 15 days after the end of the Decree Law 8/2020, which is one month that can be extended by the Government.

Taking advantage of this facility without meeting the requirements has legal consequences. Do not hesitate to contact SUN LAWYERS to avoid sanctions and for further advise.