By Welex, multilingual conveyancing lawyers in Marbella. We have to please to lineout some words with regards to the new mortgage law in Spain. Please see previous blog written by one of the conveyancing lawyer in Marbella of WeLex, motivated Lawyers in Marbella and accountants in Spain.
Let us now see some news included in the new mortgage law in Spain and that to a greater or lesser extent will affect the granting of mortgages in Spain:
Spanish mortgage constitution expenses
The new mortgage law in Spain (article 14) establishes a new distribution of expenses and taxes at the time the mortgage is set up. Thus, they will be aware:
From the banking entity/creditor: the expenses derived from the notary, registry, agency, the tax of documented legal acts and a copy of the Deed.
From the comsumer: the valuation costs and a copy of Mortgage Title Deed in Spain
Disappearance of the “floor clauses” of mortgages in Spain
The new regulation repeals any reference to downward limits on interest rates (Article 21.3), for which credit agreements contracted with variable interest will not have land clauses.
Early amortisation clauses of a mortgage in Spain
The new law reduces commissions derived from early repayment of the credit, whether partial or total. Thus we have:
Spanish Credit agreements with fixed interest, the commission for early repayment can be:
- Of 2%, if the amortisation occurs during the first 10 years.
- Of 1.5% during the rest of the time.
Spanish Credit agreements with variable interest, the commission may be, agreed between the parties of:
- 0.25%, during the first 3 years
- 0.15% the first 5 years.
Early Expiry Clauses mentioned in the mortgage law in Spain
The creditor may consider the credit due in advance when the following requirements concur:
- a) That the consumer is in default in the payment of a portion of the credit or interest capital.
- b) That the amount of overdue and unmet instalments equals at least:
- At 3% of the credit granted, within the first half of the duration of the credit or the equivalent of non-payment of 12 monthly instalments.
- At 7% of the credit granted, within the second half of the loan, or the equivalent of non-payment of 15 monthly instalments.
- c) That the creditor has required the payment to the consumer by granting a period of at least one month for compliance and warning that, if it is not attended, the creditor will claim the total repayment due on the credit.
Documentation and guarantees for individuals
The creditor must provide to the consumer with the following documents before granting the credit agreement
- European Standardised Information Sheet (ESIS), which has a binding offer for a minimum period of 10 days.
- Standardized Warning Sheet of a mortgage in Spain. The creditor will also deliver this document, which includes information on the clauses of mortgages, rates, interest, expenses, periodicity of payments, etc.
Consumer must appear at least twice before the Notary. The first time, at least one day before the signing of the Credit Agreement with Mortgage Title Deed, in which the Notary will advise them for free and to sign a questionnaire and draw up a minutes where the notary states that the consumer has been duly informed and advised. The second appearance before the Notary will be to grant the Credit and Mortgage Title Deed
Here we must take into account those foreigners who desire to arrange a Credit agreement in Spain, the need to appear before a Notary two different days. Do not hesitate to contact our multilingual law firm in Marbella!
Wish to learn more on the new mortgage law in Spain? Do not hesitate to contact the conveyancing lawyers in Marbella and accountants in Spain of WeLex! Motivated and efficient lawyers and accountants under one roof!.