Spain's new mortgage act will go into effect in 2019!

As a result of the June changes to mortgage lending in Spain, we will recap all the latest changes briefly. Pro-consumer changes made the vast majority of these changes, resulting in significant benefits for borrowers in Spain. مواضيع نقاش

Effective as of Monday, June 17, 2019, all changes take effect.

Mortgage loans granted as of this point will not have any floor clauses (collar clauses) attached to them.

Prior to this change, if a borrower fell behind by 12 quotas or 3% of their capital, they were subject to the repossession procedures. That means a lender now must wait at least 12 months after defaulting before they are able to repossess. In the past, arrears had to pile up to the tune of three months before the repossession procedures of a lender could be started.

This new rule requires borrowers to go to a Notary at least ten days in advance of signing the mortgage deed. In addition to having the ability to ask any questions about the terms of the mortgage, the borrower will also have the opportunity to ask the Notary witness about any relevant matters relating to the Mortgage. If the borrower appears unaware of the terms of their loan, the Notary may challenge them. It will happen a second time with the loan originator signing the Mortgage deed and making the loan legally formal.

A copy of the mortgage deed will be made available to the borrower at least ten days prior to signing the deed.

When you take out a mortgage loan in Spain, here are a few things to be aware of:

the borrower pays for the following:

The property appraisal (in general, in the range of 400-700 Euros), which is on the average. The borrower has the freedom to select the valuation consultant of their choice.

the lender pays for the following:

the entire mortgage loan amount is subject to the Stamp Duty (AJD)

Management fees handled by a manager.

Notary charges.

The Land Registry charges.

6. Lenders will no longer add additional linked financial services and products, such as life insurance, pension plans, or credit cards, to a mortgage unless specifically requested by the borrower.

Now, mortgage early repayment penalties are capped, which has a significant impact on the impact they have on borrowers.