Credit: Fluent Finance Abroad (Edited copy)
There has been a lot of talk regarding the new Spanish mortgage laws that came into force on the 16th June 2019…
The changes to the rules and regulations are not a directive from the Spanish government but a directive brought in by the EU, the Mortgage Credit Directive 2014/17/EU which should have been implemented since 21st March 2016. Countries like the UK implemented these new rules on the due date, mainly because the UK mortgage market is already highly regulated, and the new changes had little impact.
The Spanish mortgage market and people operating within it, have not been regulated to such an extent hence why it has taken 5 years for the Spanish authorities to finally get around to enforcing these new rule changes.
For consumers or Spanish mortgage borrowers, the changes to the rules mean that there has to be greater transparency; which is a great thing for consumers in the Spanish mortgage market, especially given the problems borrowers have had in this country over the last 15 to 20 years with mortgages either being miss-sold by bankers & abusive clauses being inserted into mortgage contracts without being fully disclosed or explained to the consumer.
There will be some negatives regarding these new rules. This new way of doing things will mainly mean that getting a mortgage application to completion may take a while longer than it normally does as the law now states that there has to be a 10 to 15 day cooling off period that the lender has to give the borrower along with the full and complete terms and conditions of the mortgage proposal. This is to ensure the borrower has time to reflect / consult on the deal that is being put forward, so expect completions to take a week or two longer and make sure you make vendors aware that a quick turnaround to completion is unlikely going to be possible.
The best way to avoid delays is to get your Spanish mortgage finance approved before you make an offer on a property by using an ‘agreement in principle’ facility with lenders which means that the mortgage offer is officially granted subject to survey. Once the perfect property has been sourced, the valuation can be instructed immediately speeding up the sales process no end.
The next part of how the new rules and regulations affect the Spanish mortgage market is how it regulates the people / companies that advise on Spanish mortgages.
This is where the new directive really makes a difference to consumers as anyone who claims to be an EXPERT in Spanish mortgages and their rules and regulations must certify that they are indeed qualified and licenced to give advice on Spanish mortgages.
From now on, any person or company who wishes to conduct mortgage business in Spain must comply with the following rules and regulations or risk being fined or worse.
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