After the controversy caused by the floor clauses, the citizen protests and the reactions of the banking sector, the Congress of Deputies has managed to carry out the expected Regulatory Law of Real Estate Credit Contracts. The main objective is to provide greater protection to customers and also to provide security to financial institutions. This law supposes some important changes in terms of mortgage expenses; and to make them known in detail we have prepared this article.
The new mortgage law
The new law provides that banks have until the end of May to adapt. Therefore, it is perhaps prudent to wait until that date to sign a mortgage; or failing that, negotiate with the bank the inclusion of the modifications. Many of the changes represent significant savings for the client with respect to the current law. For example, it is estimated that the savings for the expenses that the client stops assuming can exceed 2,500 euros.
What are the expenses linked to signing a mortgage?
Next, we will list the different mortgage expenses and specify who must take care of them, according to the new mortgage law.
Since in the mortgage the house is the guarantee of the loan, it is necessary to value said good. An appraisal or appraisal must be performed by a Appraisal company approved and supervised by the Bank of Spain. Fees can vary, but they fluctuate between 400 and 1000 euros. This cost, according to the agreement reached between the political parties at the time of drafting the law, must be borne by the customer.
Although not required by law, the banks—who are in charge of these expenses— They usually hire an agency that takes all the paperwork. As each agency can freely establish their fees, it is difficult to calculate the cost, but they are usually around 500 euros.
The notary fee is what does a notary charge for his work. This cost has been set by law since 1989 and is calculated based on two factors: the value of the operation and the number of pages that make up the property deed.
This expense contemplates some reductions, for example in the event that the home is protected or is a property in which the administration or a public company intervenes. Notary fees must be paid by the bank.
In this case, it is the property registrars fee. They are set by law and their value depends on the property. We can establish an average cost of appraisal around 400 euros. As in the case of notary fees, appraisal fees they must also be paid by the bank
Documented Legal Acts (AJD)
These mortgage expenses have been called the “mortgage tax”. He is responsible for the political and social storm that has included a rectification by the Supreme, so that it was the client who finally took charge. Nevertheless, The Government of Pedro Sánchez has imposed by law that the banks be responsible for these expenses.
These expenses they are charged by the Administration and are related to legal acts that must be registered in notarial, commercial or administrative documents. The value depends on each autonomous community and fluctuates between 0.5 and 1.5% of the sale. However, given that by law it is the banks that must pay these AJDs, it is expected that some communities will begin to make a move. The first has been Catalonia, which has already abolished the reduced rates and has established that the AJD have a general rate of 1.5%. In this way, the income for the public coffers will be greater.
this commission the bank charges the client for the concession of the mortgage and can be up to 2% of the transaction. However, some entities do not apply it as part of their commercial policy.
Apart from the AJD, the sale of a home is taxed by some taxes:
- VAT(10%) if the house is new
- Tax on property transfers (ITP), applied to used housing. It can vary, depending on the autonomous community, between 6 and 10%.>
Other changes of the new law:
In addition to those that have to do with mortgage expenses, the new law implies other novelties:
- It expands to 12 unpaid installments in order to proceed with an execution.
- There will be no floor clauses and dation in payment will be voluntary, provided that the parties agree, despite the fact that the guarantee on the patrimonial responsibility of the mortgaged asset is not mandatory.
- During the first 10 years, there will be early amortization commissions in fixed-rate loans that are cut in half and will be set at 2%; later, from that period, they will be at 1.5%. The client will choose the type of amortization, either 3 or 5 years.
- The mortgagee can subscribe with another bank contracts for the acquisition of home insurance.
- The customer can Subrogate your mortgage free of charge
- The banking entity There will be no type of commission for novation of the mortgage.
- Savings banks and credit cooperatives must also pay AJD taxesfrom which they were exempt before the new law.
- The bank grants 10 days to the client to analyze all the information pre-contractual before signing the mortgage.
- The code of good banking practices will apply permanently.
These are the novelties of the new mortgage law. It will significantly affect the sector, so we will have to be careful, when signing a mortgage, which entity suits us best. What is clear is that we must go to the bank with well-studied information, to be sure that we will pay only what the law establishes that we must spend for mortgage expenses.