Tips for negotiating your problem mortgage in Tenerife

As the recession bites in Tenerife, the biggest monthly bill that man expats need to face is their mortgage.  If you are having problems repaying your Tenerife mortgage, then the following tips may prove useful when dealing with your bank:

1 Be persistent
The first reaction of your bank manager is likely to be uncooperative and they even may read you the riot act explaining that any assets you have in other countries will also be used to pay off the debt.  The aim of this is to guilt / scare any money that you might have elsewhere.

2 Don’t go AWOL
Answer the phone when they chase you, if only to tell them that you cannot pay.  They will be more willing to help if they can get hold of you.

4. Check out the government help
You may qualify for government help with your mortgage.  Keep your eyes on this webpage to learn of any updates.

3. Change to interest only
If you only pay interest for the next 2 years and not the capital of your mortgage, then this will reduce your monthly payments.  Lenders are increasingly accepting these alternatives.

4. Revise the rate
At the time of writing, the Euribor has been falling, and if your mortgage is reviewed annually or semi-annually, then try to get it reviewed quarterly.  This will reduce the monthly interest repayments.

5. Rent it out
Propose one of the above savings in combination with an increase in income from renting the property and you will have an even more persuasive case that the bank is more likely to accept.

6. Switch lenders
As long as you are not in arrears, you might find another lender who is able to offer a cheaper mortgage.  Often the fees involved will be paid by the new lender.

7. Get their attention
Ask for an appointment to hand back the keys.  This should bring them to the negotiating table to try and find solutions.

8. Hand back the keys
If your property is not in negative equity, then you might propose a dacio en pago.

If none of the above can solve the problem, then it is likely that the process involved in repossessing a property in Tenerife will begin.