|The Bank of Spain has published on July 13 of this year the Guide to access to mortgage loans. You can access it through the following link. (http://www.bde.es/bde/es/secciones/informes/Folletos/guia_de_acceso_a)
“It is a compendium with all the necessary information for the consumer who accesses this type of credit to purchase a home. The Guide aims to provide citizens with the keys to adequately understand and value the different elements of what will, in all probability, be a very relevant decision for their personal finances.
This Guide must be available for free at branches and on the digital sites of financial institutions that offer mortgage loans.
The Guide describes what mortgage-backed loans and credits are, their characteristics, and stresses the responsibilities assumed by the customer when contracting them and the consequences that may result if they do not meet the obligations assumed when signing their mortgage. In addition, it details in detail the basic elements of these products, such as the amount, the appraisal, the terms, the amortizations, the commissions and usual expenses and explains what the Equivalent Annual Rate (TAE) is, the real cost of the loan.
The Guide also dwells on one of the fundamental aspects of mortgage loans, such as interest rates, limitations on their variability, hedging mechanisms in variable interest rate contracts and contracts denominated in currencies other than the euro. .
The Guide also reminds what information the client must receive both before contracting their mortgage and at the time of signing it, the content of the contracts, the intervention of the notary and the registration in the Property Registry. Lastly, it also deals with entity-client relations after the formalization of the contract, as well as everything related to installments, interest rate reviews and early repayments.”
The above text is a transcription of the information provided by the Bank of Spain and really, as a Notary, I feel a bit disappointed by the way I explain what my role is, within the process of contracting a mortgage loan. In my opinion, it leaves the door open to the consideration that the Notary is one more obstacle to be overcome by the mortgage loan contracting party, when in reality it is the way to ensure that everyone can have adequate information on the consequences of contracting a a product with these characteristics.
I never tire of pointing out that the work of the Notary Public, in all types of operations, but especially in these, is aimed at inform the parties and warn about the relevant circumstances of the contract and the possible consequences of their actions.
In order for all the Notary's work to develop the potential entrusted to it, it cannot happen, as has unfortunately been the usual practice, that after weeks of negotiations with the bank, procedures, comings and goings, the client already finds out in the office of the notary, present around the table the bank employee, the representative of the agency, sometimes parents or in-laws, as guarantors, if you buy the apartment that you mortgage, the sellers and the real estate agent, for example, among many other things, that the mortgage has a floor clause, the real consequences of the existence of a guarantee, the possibility that it is not bought by undivided halves or what happens when the parents are as usufructuaries of the house….
In order for all the Notary's work to develop the potential entrusted to him, it is essential that the notary advise the client prior to the date of granting the deed, in a situation that allows him to assess whether to contract or not. This advice to which one is entitled is free and can only be developed through awareness of the right of consumers to the free choice of notary by the client, which is essentially linked to the principles of independence and impartiality that must govern the notarial performance.