The new mortgage law came to action on 17 June 2019 to coordinate with the legislation of the neighboring countries and provide security not only to the banks but importantly to the mortgage buyers.
The important change in the mortgage law is the mortgage borrower has to select the notary(an authorized person) where the signature of deeds takes place. However, the additional rule added is that buyers have to attend the notary on 2 separate days.
The consumer should receive all the pre-contractual documentation at least 10 days before in advance for signing the public deeds for a mortgage. If the documents are not signed in the 10 days timeframe, they would be considered not eligible.
During the 10 days time period, the client should seek advice from the notary, and notary officials will provide the information provided regarding the clauses contained in the European Standardised Information Sheet-ESIS and the Standardised Warning Sheet (Ficha de Advertencia Estandarizada- FiAE) on an individual basis, after the proof of advice provided to the mortgage borrowers, they will verify if the facts of contracts are understood or not.
Financial Entity to submit :
The European Standardised Information Sheet(ESIS) is a document that consists of a binding offer for a minimum of 10 days, and that persists the personalized Loan terms
The Standardised Warning Sheet (FiAE) in which the specific expenses, clauses, and most relevant data are added.
Draft mortgage contract
The terms & conditions of the insurance policy
In the case of variable-interest mortgages, a simulation of the mortgage installments payable
The aim of the ESES is to provide clarity to the pre-contractual document which the consumer should receive 10 days prior. Once the notarial act is signed out, the purchase and mortgage deeds process starts out. The notary meetings are held on two different days.
Benefits of the new mortgage law:
Mortage Documentation Cost: For years, the borrowers were supporting most of the expense of the documentation, but the new mortgage law stated that the bank is responsible for most of the basic documentation such as agency fees, stamp duty, the notary, and taxes.
Consumer Protection: The primary reason for the alteration in the monetary laws is to strengthen consumer protection. The bank must deliver the mortgage draft to the client 10 days before the agreed signing date.