A hypothecating loan is the set of a personal loan and
a hypothecating guarantee on a building. The mortgage is an accessory
guarantee, whose validity is subedited to the one of the loan.
The loan is a contract with which the bank gives an amount of money and the
form is regulated in which the borrower must give back it.
The mortgage guarantees as well the amount of the capital of the loan, as the
possible interest and expenses in case of judicial claim for the cases of non-payment.
The basic characteristics of the mortgage are the following ones:
The mortgage remains although the loan is reduced that it guarantees. Until
it is not cancelled, with the express consent of the financial organization
through deed of cancellation presented in the Property Registry, the mortgage
does not disappear, although there isn't ought nothing of the loan.
It has to constitute itself necessarily in public deed granted before Notary
and to subscribe in the Property Registry so that it has validity.
If you do not pay the loan, the bank can promote the sale of the hypothecated
property, by means of public auction to satisfy with that amount the overcome
and not paid debt.
Submission to law: it determines before what courts will be presented the complaints
in case that disagreements between both contracting parts arise.
The mortgage does not prevent that the property can be sold to another person,
but there has to be considered that there is needed the consent of the financial
organization where it is formalized that the new buyer becomes position of the
loan. If this one does not lend its consent, in case of non-payment of the loan
the seller follows responding of the debt.
