A mortgage is a real right on real estate that secures a certain claim. In practice, we most often come across a mortgage when securing a housing (mortgage) loan that we obtain from a bank. When we take a loan and secure it with a mortgage, the mortgage is entered in the land register. After payment of the credit, it is necessary to take care of its deletion from the land register. The bank does not delete the mortgage automatically.
We can regularly repay the loan to the end, and after full repayment, we can start the process of deleting the mortgage. However, it is possible to sell or buy a mortgaged property. In this case, the deletion of the mortgage must be arranged beforehand.
What is the mortgage cancellation process in Slovenia?
In order to delete a mortgage from the land register, the creditor (usually a bank) must issue a cancellation note certified by notary, also known as a cancellation permit. With a certified cancellation note, the debtor (usually the owner of the property) can have the mortgage deleted from the land register.
When selling real estate burdened with a mortgage, i.e. selling before paying off the entire loan, the process is a bit longer.
The seller or the owner of the property must inquire with the bank in advance about how much is still owed on a certain day. At the same time, the bank issues a statement of intent to issue a cancellation deed, with which it undertakes to issue a cancellation deed when the debt is repaid in full.
The amount of the purchase price and the payment dynamics are part of every sales contract. In the case of the sale/purchase of real estate on which there is a mortgage, both parties are best protected if they agree in the sales contract that part of the purchase price goes directly to the bank and not to the seller. In this way, the buyer is protected, ensuring that the debt will be repaid, and the mortgage will be erased.
Once the debt to the bank has been paid, the seller must obtain a certified cancellation deed note from the bank, with which he can start the mortgage cancellation procedure. Only after obtaining the deed that enables the cancellation of the mortgage, the last part of the purchase price is transferred to the seller, and the buyer is registered in the land register.
Are you buying or selling a mortgage-encumbered property? We are happy to help you carry out the process of selling or buying such a property.
For more information, visit our website or contact us; Phone: 00386-40-626-131, E-mail: tajnistvo@bazarealestate.com.
