The mortgage credit It is a long-term commitment, where in the active financing period endless eventualities may arise for the borrower, such as his death, so it is important to know what to do to settle the debt.
According to Morgana, a digital platform for mortgage credits, the mortgage It is a financing full of guarantees, so that the bank ensures the payment of the debt and in the event of the death of the debtor, it is no exception.
For Juan Carlos Cué, Legal Chief of Morgana, within the monthly payment that is paid to the bank in a credit of this naturelife insurance is also paid.
“When contracting this financial product, part of what you pay in your monthly payment is life insurance, in which, in colloquial terms, the bank is named as the beneficiary. Thus, in the event that the owner of the credit, the bank collects the insurance and the debt is released, as long as you are up to date with your payments. What happens if the owner dies? credit mortgage? The insurance pays the bank,” said Cué.
However, it is necessary that either the heir or the beneficiary, present to the bank the death certificate that proves the death of the debtor and in case there are several heirs, said procedure corresponds to the executor.
“This does not happen automatically, it implies a procedure before the bank, presenting a death certificate and having to deal with the bureaucracy of banking processes. The most important thing to keep in mind is that there are only two people who are going to be able to carry out this procedure. : the heir and the beneficiary. If there are several heirs, the person who was appointed the executor must carry out the procedure, “said the Morgana executive.
The firm explained the difference between heir and beneficiary:
- Heir: It is the person to whom, by provision of law or by designation in the will, all the property of the deceased corresponds.
- Beneficiary: It is the person who is designated as such in the bank format, at the time of opening the account.
For Morgana, it is a recommendation and good practice to designate as beneficiary the person who has been named heir in the will.
What happens next?
Once the death certificate is presented, the heir or beneficiary will have to request the Letter Proof of No Debtwhich is the document that proves that the bank is no longer owed, as well as the Mortgage Cancellation Letter addressed to a notary public.
Once the notary receives the document, he prepares the deed, collects the signatures of the legal representatives of the bank and sends it to be registered in the Public Registry of Property with the real folio corresponding to the property and once it is registered, it is delivered the first testimony of the deed to thus leave free of the encumbrance of the mortgage.
To take possession after all these procedures, Morgana’s lawyer explained that it is still necessary to carry out two acts, which are carried out with a judge or a notary:
1. Designation of heirs and acceptance of the inheritance. Where basically the heir(s) say that they do want the property left to them.
2. Adjudication of Inheritance. Through this act, the name of the heir remains as the owner of the property once the Tax on the Acquisition of Real Estate is settled.
Once these acts are celebrated, with all the corresponding insurance and tax payments, the heirs can enjoy their home.
