Since June 17, 2019, the new mortgage law that regulates the process of contracting a mortgage, from advertising to signing it, has been applied. The aim is to ensure transparency and improve understanding of such contracts. But, in practice, how will it affect us? The experts respond and agree that the norm favors the following extremes:
1.- Transparency. Undoubtedly, legislators want clients to know their loan in detail and know what they are signing.
2.- Customer protection. Establishes an inalienable right for the buyer to receive impartial and free advice from the notary who will register their loan. The buyer must choose a notary and go alone, without the representative of the bank. If this is not done, the notary will not be able to authorize the deed. The buyer chooses the notary and not the financial institution.
On the other hand, the bank that lends you the money has the duty to inform and deliver all the prior documentation required by law at least ten days before the signing of the deed. He delivers documentation to the client, certifies that he has attended and that he has been advised and informed. The pre-contractual act is constituted, which is free of charge.
3.- The distribution of expenses. The approval of the new law makes their distribution more equitable between the client and the financial institution. Before, the client assumed all the expenses and now he will only pay the appraisal and the notary copies. The bank will pay the agency, notary and registry invoices. The company that performs the appraisal may be chosen by the buyer and does not have to be the one proposed by the bank.
The copies of the deeds of the mortgage loan will be the responsibility of whoever requests them, with the exception of the simple copy that the notary will send to the client’s email (free of charge).
4.- Foreclosure is another of the great benefits of the regulation. From the outset, the start of the eviction procedure is hardened. The bank will not be able to execute the mortgage until the client does not owe 12 months or the debt means 3% of the mortgage in the first half of the loan, before it was only 3 months. In the second half of the loan, the term for execution goes from 12 months to 15 or 7% of the debt.
It is also interesting to mention the requirements that future mortgages must meet because, with the new regulation, the bank will be obliged to carry out a solvency test, at no cost to the client.
Banks must take into account to grant a loan the employment situation of the client, the current income, the foreseeable income throughout the life of the loan and, even, the income that will be received in retirement if the mortgage is extended beyond of working life. They must corroborate the assets owned, the savings, the fixed expenses and the commitments already assumed.
And finally, Does the New Law affect you if you already have a mortgage?
The answer is no. All deeds prior to June 16 are governed by the old regulations. Therefore, they will not be able to claim the expenses they paid when they formalized their mortgage or request a refund of the tax on documented legal acts (AJD).
Of course, whoever has a mortgage already signed can benefit from the commission limits in cases of subrogation or novation of the loan.
With more than 10 years of industry experience, Proddigia is specialized in the marketing of exclusive homes in Sant Cugat and Sarrià, both for sale and for rent, new and second-hand, and in asset management. He has in-depth knowledge of the market, extensive experience and the necessary technology to be able to advise on all areas of the real estate sector.
The firm is one of the most solid agencies in Spain with a young, enterprising, dynamic and highly qualified team. We pride ourselves on offering top-quality, results-oriented customer service. We offer you innovation, exclusive treatment and totally transparent processes.
