Villas for Sale La Marquesa Golf Rojales
What's new in Spain's new mortgage law, which will come into effect in 2018
The priority objectives of this reform are to encourage fixed-rate mortgage contracts and strengthen transparency.
The new law, which is expected to enter into force in the first half of 2018, seeks to provide transparency to consumers and legal security for banks.
His arrival will bring changes for the current mortgaged, such as the possibility of converting a variable mortgage into fixed or more defences against evictions. For new loans, it will also bring less commissions and greater control by notaries. We summarize the impact in each case:
Promotion of the fixed rate mortgages.
The new law will encourage the transformation of mortgage loans that go from variables (most of which exist in Spain) to fixed. In the event that you want to change the mortgage bank, the maximum fee for early repayment will be 0.25% in the first three years. From the third year, this commission will be suppressed.
The bill establishes that when a citizen wants to sign a mortgage contract he must receive, with seven calendar days in advance, a standardized information sheet with the main characteristics of the contract and a standardized one with warnings about the sensitive clauses that appear. This sheet should include estimates with various possible scenarios.
In those seven days, the consumer must go to the notary of his choice. This professional must check that he has all the mandatory information and resolve any doubts about the contents of the mortgage and the existence of potentially abusive or opaque clauses.
Once informed, the borrower must sign a notarial deed, which will be free for the borrower, in which he shows that he knows all the necessary information.
The standard lowers the prepayment of loans. In the mortgages of variable type they will be set at 0.5% of the amount delivered in the first three years; 0.25% until the fifth year, and zero after.
In the case of fixed rate loans, the maximum percentages will be 4% of the amount advanced if the payment is made in the first 10 years and 3% if it is later. At present, there is no legal limit for fixed rate loans.
Prohibition to sell linked products.
The bill prohibits banks from offering products linked to mortgages for sale. That is, those cases in which you can only contract the loan if you buy other products, such as home insurance.
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