What is the mortgage transparency act?

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Following the new mortgage credit law of  new regulations were established to regulate abusive clauses in loan contracts. Among them is the transparency act , which aims to protect the client when applying for a mortgage . In today's blog we will explain how it works and the keys to transparency when requesting the loan.


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What is the transparency act?
The transparency act is a document that a notary must prepare after checking all the documentation and advising the client, before signing the contract. In the new mortgage law, a new role is attributed to the notary and the responsibility of Chinese Overseas America Number Data advisor is objectively assigned to the borrower.

transparency act
Infographic about the Housfy mortgage transparency act.

To guarantee that the process is transparent, the bank will have to send the client, within a period of 10 days prior to signing, the documentation that we are going to detail.


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FEIN and FIAE
The FEIN or European Standardized Information Sheet is a document in which all the information regarding the mortgage appears. The entity is obliged to maintain all the clauses and conditions established in the FEIN Hipoteca . This way, the client can read it carefully before signing the contract to ensure that they agree with the conditions.

The FIAE or Standardized Warning Sheet , in this document all the most delicate clauses and points appear. The objective of this sheet is to warn the client of all the risks assumed when contracting the mortgage, especially in cases such as multi-currency mortgages, cancellation or early repayment clauses, etc.

These two documents are intended to guarantee that the client has all the guarantees and transparency when signing the contract.

Types of interest
The contracted interest rate and how much you would pay at the end of the mortgage will have to appear. Furthermore, if it was a variable interest rate, there would have to be an independent document in which the possible scenarios for the evolution of interest rates would appear.

Linked products and conditions
If there are linked products, it will be necessary to detail what they are and the conditions they entail. Following the 2019 mortgage law, banks cannot force the client to contract linked products to apply for the mortgage, but they can offer them to improve the conditions of the loan.



Management expenses
The client will also have to know what all the management expenses and products linked to contracting the loan are. Currently, expenses are lower than before the new law, but it is important that you know them before signing the mortgage.

Previous copy of the contract
It is important that you receive a copy of the contract in advance so that you can read it carefully and ensure that you agree with all points. In addition, you will have the opportunity to consult with professionals, be it the notary or a lawyer, to ensure that all the points and clauses are included.

Right to notarial advice
This is a document that certifies that the client has the right to notarial advice before signing the contract.

In the transparency document, the notary will sign that the client has had access to all this information with a prior period of 10 days and that he has received notarial advice before signing the contract.