August 7, 2020

Applicants for a mortgage must pass a test before a notary – The Province


What is the difference between amortgage fixed and a variable? Do you know what raising the Euribor is? Do you know what a floor clause is? Beware, if you are going to sign up for a mortgage from June, you will have to pass a test that most likely includes very similar questions. If it does not exceed them,goodbye to the loan.

This is one of the measures included in thenew mortgage law that Congress has just approved and that will come into force presumably in June, three months after the rule has been published in the "Official State Gazette" (BOE). The evaluator of this exam will be a notary who will have to draw up a certificate, free for the mortgaged future, where it will be determined if the consumer has sufficient knowledge to receive the loan.

At the moment, notaries are not clear about even the questions they are going to have to ask. If the exam will be standard or personalized. What is certain is that the new mortgaged will have to approve it, at least, one day before signing the mortgage before the notary.

But ten days before signing, the client must have in his possession all the information and conditions on the credit that he is going to sign. Everything as clear as possible, because you're supposed to study it if you want to approve. The exam has to pass both the borrowers and their guarantors and without the presence of the bank, to avoid any kind of misunderstanding. The test, in addition, will be completely free, so the notary will not get any compensation for being an examiner.

Notaries doubt the effectiveness of this type of exam and even assure that they could become a double-edged sword that turns against themselves. It is a clear shield for entities, which are guaranteed to a certain extent that they will not be brought before a judge. And if they are sued they will have a document that will notarially guarantee that the borrower had understood the conditions of the mortgage. All this comes in a context in which the courts are giving the reason in all these legal battles to the consumers, in many of the cases with the argument that they had not understood well what they were signing.

The new mortgage law was approved a week ago in the Congress of Deputies. Among the main changes that the standard introduces, besides the aforementioned examination, the bank's obligation to assume most of the expenses that come with the formalization of a mortgage. Clients will have to face the cost of the appraisal of the home, but they will no longer be charged the notary and property registration expenses, nor the tax bill of documented legal acts, which will have to be assumed by the financial entities. The rule also hinders banks from initiating the process to claim unpaid loan installments.

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