In order to recognize the definition of the multi-currency mortgage it is necessary to identify it as a loan made with currencies other than the one handled in the locality, which requires great attention within the parameters in which the processing is done, which is detailed in the following article.
Multi-currency mortgage product that can be handled with currency from different countries
Definition of the multi-currency mortgage
The mortgage is a formality by which a person leaves as collateral one of his assets, specifically a property, to the institution or person that gives him the loan, called creditor; In this way, if the person who requested the loan does not comply with the parameters detailed in the contract, the creditor will have the right to require the sale of the asset in order to collect what is owed. The multi-currency mortgage definition It refers to the mortgage loan that can be canceled with currencies other than that of the locality.
These installments are established at a different price due to the variation of the exchange rate or that cancels the established installment by paying the difference of the exchange variation, which generates an excessive expense for the person who has applied for the mortgage loan, and can cause serious damage to its economy. Every loan requires an estimated period of time for its cancellation; the actual period for this return, as established by financial banking entities and housing funds, involves a term that ranges from 7 to 30 years.
The magistracies have issued many decrees regarding the multi-currency mortgage, and the legislation is solid and peaceful; where reference is made to the nullity of the mortgage when it is carried out in a deceitful manner or when the interested party does not have a competent profile that makes it easier for him to clearly know the dangers he was assuming.
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Services
This type of product allows the client to take advantage of the low interest costs of any currency in order to speed up and make loans cheaper; Likewise, it has a series of references that is not based on the Euribor, but on the Libor, which is the average that is taken as a reference pattern for exchanges and transitions in international banking. This utility model is below the Euribor currency, in order to allow the cancellation of the loan where the difference of 1,75% or 2% is included.
Comparing this percentage where the profit plus interest is charged with the 5% that is currently used for other types of products that are paid with the euro, is of great benefit; It is relevant to know, like the Euribor, in relation to the Libor that has terms from one day, thirty days, ninety days, three hundred and sixty-five days; for the moment of making a mortgage contract, it will be the one that indicates the appropriate index for its cancellation, demonstrating the importance of knowing the definition of the multi-currency mortgage.
To this type of loan, a mechanism must be added that is very similar to the one applied to conventional mortgages with the currency of the locality; it can be another currency if the advance is agreed in euros or in a different currency; Frequently, this differential to add is higher, pointing out that the agreement period of these multi-currency mortgages does not exceed 20 to 30 years. Customers who have enjoyed this product testify to the flexibility, due to the ease of exchange between mondas from different locations.
Where you seek to determine the debt in the local currency, you can choose the one that best suits you in relation to the calculated interest, leaving the amplitude for when you want to return to handling the negotiation with euros.
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Risks of the multi-currency mortgage
At the time of establishing a multi-currency mortgage contract, the person who makes the loan application must keep in mind the price of the currency, which can fluctuate continuously, this price is determined by stock market transactions. The applicant will not know the total amount of his debt due to the different variations when paying with a different currency from the area, when the negotiation is closed he will be able to know the amount paid for that good, all this procedure is within the framework of legality approved by the high magistrates.
By agreeing the mortgage in an unequal currency whose price changes on the stock market every day, it presumes that the capital owed to the bank is another, with this, the salary that can withstand variations based on the utility rates of the currency; at the same time, these transitions believe that the cost of debt can skyrocket. What was believed to be an occasion and an improvement when taking into account the types of utility of another flow, can become a nightmare for the client.
The lease of this type of mortgage, in addition to the risks involved, the hiring has a high cost, since the replacement of the supplier is not admitted and it must be formalized as a new mortgage. In this situation, the amount of the same is increased, which is not the same when it is acquired than when it is sold because the latter has added the mediator's commission, with which hiring it is due 1% more from the beginning.
Multicurrency mortgages allow changing the capital in which the advance and its different levels are computed, for the payment of the consequent commissions; however, the middle class applicant does not have the skills or abilities to benefit from these variations, since the vast majority of clients do not have the information on how the currency fluctuates, so it is necessary to know the definition of the mortgage multicurrency.
How to claim the multi-currency mortgage?
There are numerous decrees that have given the nullity of the different cases of the mortgage loan; the Judgment of the Supreme Court for November 15, 2017, which indicated that some of the agreements were executed in a non-transparent manner for not having notified each of the clients of the risks and dangers that linked the negotiation. This indicates that any creditor who has agreed to a multi-currency mortgage can claim it without submitting to decree terms, it is also viable to require even those that have already been liquidated.
Requirements
In order to claim the multi-currency mortgage, the following requirements must be met: The client was not aware of the particular characteristics of the product. For this it is necessary:
- The person does not have a trained profile.
- The financial banking entity dispensed with its obligations by transmitting the information to its users.
The bank is the body that must clarify and demonstrate that at all times it has fulfilled its legal functions in the processing of multi-currency mortgages; It is the reason that many financial law specialists seek these cases because they easily sue and win.
Effects of the claim
The judiciary is following up on the multi-currency mortgage documents, considering them partially null, that the foreign currency item of the loan should be eliminated when it has been commercialized due to lack of transparency; yielding as a result, the amount contributed as capital and the interest on liens have to be recalculated, mounting it in the Euro currency and taking the Euribor as a reference.
This recalculation will reduce the deferred value of liquidation in what has been paid for the increase in fairness of the currency clause; in case of passing a balance in favor of the user, it will have to be canceled by the bank. At the time the claim for which it has been canceled is made, the client can recover all the money that he has amortized in excess due to that item; It is recommended for all clients to hire a finance lawyer.
Multi-currency mortgage judgments
In recent years, multiple rulings have emerged in relation to multi-currency mortgages where legal experts have been successful against financial entities, leaving the magnitude of the agreements established in the public light. Today these mortgages are in fashion when the Euribor valued above 4%, although cases and judgments continue to appear where they are pronounced in favor of the client. In this type of sentences they point out several aspects such as:
- The amount that the banking agency must pay.
- The agreement that the mortgage will be executed in euros.
- The declaration of nullity of the multi-currency mortgage in relation to commissions, currency exchange and the request for insolvent status.
- The contract by the financial entity to return the proceeds of these conceptions with their corresponding utilities included.
- Opinion of the magistrate that the banking agency did not comply with the investigation obligations to which it is imposed, only exposing the user to the benefits of the product, but not informing him of the risks and dangers to which he is exposed.
Conclusion
Within the multi-currency mortgage, it is worth pointing out the steps for the moment of presenting a claim for a multi-currency mortgage, the first thing that the client must do is go to the bank to present the case regarding the loan, taking the euro currency as a reference and the Euribor, in the same way, request the reimbursement of the amount paid in excess during the stay with another currency; The entity must make a proposal to solve the situation, which must be studied carefully. It should not be signed without review.
In the opposite case, if there is no proposal or solution by the banking agency, the claim must be filed in order to go to the lawsuit, since the legal path supports the request of those affected with these agreements; where the presence of the legal expert will provide security.