Article written by Susana Garzón, notary public and blog contributor network notaries
It has been more than a year and a half since the Real Estate Credit Law came into force and we notaries began to intervene in the pre-contractual phase of loans, meeting with consumers to answer your questions and authorize the transparency act prior to formalization of the mortgage. In it, in addition to verifying that the legally required documentation has been delivered in a timely manner, we record the advice we have provided and collect the questions raised.
During this time I have been able to verify that most people understand the main characteristics of the loan: capital, duration, if the interest rate is fixed or variable and the expenses they assume. In the same way, I have verified which are the most common doubts.
For example, if the loan has a floor clause, something that the new law has expressly prohibited. In addition, it has established that the remunerative interest may not be negative. Also, if they are required to have damage insurance on the mortgaged property.
In this case, I explain that the law allows the creditor entity to be able to demand that they have it contracted (and also, although it is less frequent, insurance to guarantee compliance with the obligations of the loan contract), but that there is freedom to contract these insurances, so that what in no case is mandatory is to have to contract them with the company that the lender determines. Therefore, the pre-contractual documentation that the creditor must deliver must include the conditions of the insurance it requires.
Related to the previous question, they often ask me if they are required to have paid payroll or the pension or periodic receipts (such as water, electricity, telephone, …) in an account opened at the creditor, or if they have to contract other insurance (life, health or car …) and / orpension lanes or investment products with the company that it designates.
In these cases I usually insist that The contracting of these products or services, called combined sales, is not mandatory. Yes, it can have certain advantages (generally the application of a lower interest rate), but it is convenient to see if it compensates, because sometimes its cost is higher than what the interest rate reduction supposes. Therefore, the law requires the entity to inform the borrower, among other aspects, of the differences between the combined offer and the offer of the products separately. I also clarify that, in case of hiring them, they are not obliged to keep them for the entire term duration of the loan.
Another question that I am asked very often is if they can repay the loan early. The law expressly recognizes the right to reimbursement in advance, either totally or partially, and sets the maximum commission that can be charged, also establishing that this commission may not exceed the amount of the financial loss that the creditor may suffer. . That is, it can only be collected when the amortization involves financial damage to the lender.
Finally, other very frequent doubts are those related to the consequences of non-payment of fees, and although they are clear that they can lose the mortgaged property, it must be explained that debtors and guarantors respond with all their present and future assets, and jointly if there are several. That is to say: each one responds for the entire debt. Furthermore, the entity may declare the loan overdue in advance when the amount of the unpaid installments reaches the amount set by law; and the guarantee is not extinguished by death, so it is passed on to the heirs.
If you are going to contract a mortgage loan, raise all the doubts you have with the notary of your choice, with whom you will be alone and who will advise you impartially and without charging you anything for the act.
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