Zero-Debt Certificate: What it is, How to request it, and How much it costs

When you receive your zero-debt certificate it's a moment to breathe easy, feel happy, and rightfully say that your home is finally yours. There's nothing more satisfying than knowing your hard work has materialized into the beautiful reality of being free from mortgage obligations, as certified by the lending institution.

Of course, we're talking about another step towards certifying that you've paid off your mortgage, freeing your home from encumbrances, and subsequently registering ownership. This is a legal document that will be required by the notary public to verify that you have indeed fulfilled your commitments to the bank.

What is a zero-debt certificate?

It is a document issued by the bank to confirm that you have no outstanding debts solely related to a mortgage loan. Many refer to it as proof of full payment of a financial commitment, which was, of course, contracted with the bank or a mortgage institution. 

You should request this document as soon as you have finished paying off your mortgage loan, in order to then make the final payment or clear the registration matter. It is an essential document for subsequently visiting the Registry office to process the remaining documents for your home.

What is it for?

The duly issued certificate is the only proof that confirms you have fully paid off the loan and have no further commitments with the bank. This document issued by the bank primarily serves to: 

• Formalize the settlement of the respective mortgage at the Property Registry office 
• Receive the public deed of full payment for the loan received
• Release or free the home from the encumbrance or mortgage charge 
• Sell the home 
• Discover why this certificate is key in a purchase agreement

This way, the Notary Public can verify that the commitments have been settled and demonstrate this in the respective public instrument or document. In any negotiation, the buyer and real estate agencies confirm that the home has no charges or encumbrances before closing a sale. 

If the mortgage has not been reported in the Registry for its release, any transfer of ownership of the home will be prolonged until this is verified.

How to obtain a zero-debt certificate?

To obtain this document, you must go to the lending bank with whom you had the loan agreement, speak with the responsible staff, and request it. Generally, banks issue this document without charging fees, and you can request it by visiting the office in person, online, or by phone.

Who issues this certificate?

This certified statement can only be issued by the lender or mortgage institution, or by the bank where you arranged the loan. That bank is, in fact, the only entity authorized to issue this document because it is to them that you have been making your payments, and they must certify this.

Requirements to request the certificate

Given that all information is kept internally, it is not necessary to present any additional documents; they simply verify that there is no outstanding debt. If you have no late payment interest, outstanding fees, or associated insurance, to request your statement you only need to present the following:

• Having paid the final portion of the mortgage 
• Bring your National ID or equivalent proof of identity 
• Go to the bank that granted you the mortgage loan 

How long does it take to be issued?

This process can vary, and the time it takes for this release certificate to be delivered will depend on the institution that granted the loan. Generally, it is a procedure that could take anywhere from a few hours to 1 or 2 weeks, as some lending institutions expedite this process.

However, the time may be much longer if the bank that granted the loan is in a merger process or was acquired by another.

What is the cost of the certificate?

This document has no cost, and lending institutions are not authorized to charge fees for issuing it, as established by the Bank of Spain. Similarly, it is stipulated that lenders are committed to issuing this document free of charge, or face penalties. 

If they try to charge you for this service when you request your certificate, you must immediately demand a refund if you've already paid, or assert your legal rights. Although it is illegal, we all know that certain banks charge a fee for issuing the document or for sending their representative to the notary's office.

They do this to proceed with the signing of the full payment deed, but in this situation, you can choose from these options:

• If you don't want to dispute it

You simply pay what they are asking for and forget about it; generally, it may cost you very little money.

• If you want to dispute it

But you're in a hurry, you just pay the fee they demanded and then you can file a complaint with your bank to get a refund for what you paid.

• If you're not in a hurry

In this case, you can immediately complain to the bank so they don't charge you anything for this service; you just need to submit your complaint.

Zero-debt certificate template

Each credit or financial institution may have its own template; however, all must comply with certain requirements:

ZERO-DEBT CERTIFICATE

Full name or letterhead of the mortgage lender

The mortgage lender must be clearly identified.

Mortgage loan or credit nomenclature

The description of the number or nomenclature assigned to the loan by the bank must be clearly written.

Date

Details regarding the credit application date, its approval, and final payment must appear on the certificate.

Debtor

All data related to the mortgage debtor must be recorded on the certificate, including first names, last names, and NIF or NIE as applicable. An alternate address must also be included.

Property

This section must accurately describe the encumbered or mortgaged property, including measurements, boundaries, and location points.

Certifies

Finally, it must state that the mortgage loan with the aforementioned nomenclature has been paid in full.

Signatures

This is where the signature of the representative or authorized agent of the mortgage bank goes.

Place and date of certificate issuance

Of course, the location or address of the bank and the date the certificate is being prepared or issued must be added.

What to do once you obtain the zero-debt certificate?

If you have already been issued the zero-debt certificate, then you could do what we suggest next:

When we refer to this type of certificate, we mean the Notarial and Registry processing steps that confirm the loan has been canceled. You can carry out these steps personally or, if you prefer, ask the bank to do it for you, in exchange for a payment for expenses and commissions. 

This way, you can then go to the Property Registry office where you will request the respective document to keep it safe. Remember that with this title, you can offer your property for sale through a real estate agency, which handles other documents.

What happens if the bank denies me the zero-debt certificate?

Should the bank refuse to provide you with the certificate you are legally entitled to, we suggest you exhaust these options:

• Urge bank representatives to issue the certificate as soon as possible.
• Ask their authorities to explain, in writing, the reasons for their refusal or delay.
• File a formal complaint with the bank's Customer Service Department.
• Go to the Bank of Spain, as it is the superior body that supervises banks and other entities.
• Finally, resort to the competent courts.

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Conclusion

A zero-debt certificate is the only document that paves the way for registering full ownership of your home. Requesting it is quite simple, it's free, and your mortgage bank is obligated to issue it as soon as you make the request, whether in person, online, or by phone.

It is the document that authorities will require to cancel the property registration; it's your right if you have already paid off the mortgage.

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