Draft of Law for ruling contracts of home loans

The Council of Ministries, in their session of the 3rd of November, 2017, agreed to forward to the Courts the Draft of Law of home loans and the General Committee of the Congress of Deputies, in their meeting of the 17th of November, 2017, has initiated the referred Draft of Law.

Thus, the parliamentary process for transposing the EU Directive 2014/17, regarding the credit agreements made with consumers for immovable goods of residential use, begins.

We estimate that approval of the Courts to a new Law that rules real estate credits shall be given within a period from four to six months.

In respect to most significant changes included in such text, we find the following:

Commissions for early redemption decreases in mortgages with variable rate interests, which are cancelled out from the fifth year.
Commissions derived from converting variable rate to fixed rate are erased from the third year and costs of Notary and Registry have a discount.

The borrower shall receive free advice from the Notary regarding content of the contract during the seven days prior to the signing.

Requirement needed by the financial entity for initiating execution of the loans is extended to nine unpaid instalments or to 2% of the capital.

Undoubtedly, it is still very important to count with experts in law when contracting a mortgage loan. In Pérez de Vargas Abogados we have a wide experience in Banking sector, which allows us to advice the client in all process of acquiring the Property, including a detailed study of the mortgage offer, when our clients require financing and being always fully updated about new laws.