{"id":10001,"date":"2019-11-15T16:32:47","date_gmt":"2019-11-15T15:32:47","guid":{"rendered":"http:\/\/www.shmadrid.com\/blog\/en\/?p=10001"},"modified":"2019-11-25T10:31:39","modified_gmt":"2019-11-25T09:31:39","slug":"changes-mortgage-law-2019","status":"publish","type":"post","link":"https:\/\/www.shmadrid.com\/blog\/en\/changes-mortgage-law-2019\/","title":{"rendered":"Changes in Real Estate Laws and Regulations in 2019"},"content":{"rendered":"<p style=\"text-align: justify;\">Today, this article by <a href=\"http:\/\/www.shmadrid.com\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>ShMadrid<\/strong><\/a> will focus on important information for anyone wanting to buy an apartment and applying for a mortgage. As most people who decide to buy property need a mortgage from their bank, it is essential for mortgage laws to protect future property owners.<\/p>\n<p style=\"text-align: justify;\">If you are thinking of <a href=\"https:\/\/www.shmadrid.com\/owners-sales\"><strong>buying a house<\/strong><\/a> or apartment and you need a loan for this, then this article will be of interest to you. So let\u2019s discuss the key elements of the new mortgage law.<\/p>\n<p style=\"text-align: center;\"><em>Related article:\u00a0<a href=\"http:\/\/www.shmadrid.com\/blog\/en\/buy-or-rent-madrid\/\">Should You Buy or Rent a Home in Madrid in 2020?<\/a><\/em><\/p>\n<h2 style=\"text-align: justify;\">What to consider when applying for a mortgage<\/h2>\n<div id=\"attachment_10002\" style=\"width: 310px\" class=\"wp-caption alignleft\"><a href=\"http:\/\/www.shmadrid.com\/blog\/en\/wp-content\/uploads\/2019\/11\/money-168025_1280.jpg\"><img aria-describedby=\"caption-attachment-10002\" loading=\"lazy\" class=\"size-medium wp-image-10002\" src=\"http:\/\/www.shmadrid.com\/blog\/en\/wp-content\/uploads\/2019\/11\/money-168025_1280-300x199.jpg\" alt=\"toy house with 10 euro note folded over it\" width=\"300\" height=\"199\" \/><\/a><p id=\"caption-attachment-10002\" class=\"wp-caption-text\"><em>Photo via Pixabay<\/em><\/p><\/div>\n<p style=\"text-align: justify;\">This new law, called the <a href=\"https:\/\/www.boe.es\/buscar\/doc.php?id=BOE-A-2019-3814\" target=\"_blank\" rel=\"nofollow\"><strong><em>Ley de Cr<\/em><\/strong><strong><em>\u00e9dito Inmobiliario<\/em><\/strong><\/a> (link not available in English), is applicable to mortgage loan contracts whose borrower or guarantor is <strong>a natural person<\/strong>, and the property the mortgage is applied for is for residential use.<\/p>\n<p style=\"text-align: justify;\">The new regulations <strong>seek to<\/strong> <strong>protect customer individuals<\/strong>, but they also establish security on two levels.<\/p>\n<p style=\"text-align: justify;\">In short, the law regulates <strong>5 different aspects<\/strong>:<\/p>\n<ul style=\"text-align: justify;\">\n<li><strong>Rules to protect the borrower<\/strong>, as in the marketing aspect of real estate loans, establishing basic information that should always be mentioned in loan advertising, as well as information that must be provided to the borrower, before, during and after signing the contract, and obligations of assessing creditworthiness.<\/li>\n<li><strong>Standards of conduct and transparency<\/strong> for lenders, credit intermediaries and their representatives, such as staff competence and staff training requirements and remuneration policies.<\/li>\n<li><strong>Aspects related to the mortgage contract itself<\/strong>.<\/li>\n<li><strong>The legal status of real estate moneylenders<\/strong> and real estate credit intermediaries.<\/li>\n<li><strong>The penalty regime for non-compliance with obligations<\/strong>.<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><em>Related article:\u00a0<a href=\"http:\/\/www.shmadrid.com\/blog\/en\/advantage-disadvantage-buy-rent\/\">Advantages and Disadvantages of Buying and Renting a Home<\/a><\/em><\/p>\n<p style=\"text-align: justify;\"><strong>Basic changes<\/strong> in the law:<\/p>\n<p style=\"text-align: justify;\"><strong>1)<\/strong> It establishes that the <strong>interest on late payments for these loans<\/strong> will by Law be <strong>3 points<\/strong> <strong>more than normal<\/strong>\u00a0and without the need for a contract.<\/p>\n<p style=\"text-align: justify;\"><strong>2)<\/strong> The expenses arising from these loans are distributed on an obligatory basis and as follows: in short, the <strong>moneylender<\/strong> will pay the <strong>notary<\/strong>, <strong>registry<\/strong> and <strong><em>gestoria <\/em><\/strong>(administrative and legal consultancy service), and the <strong>borrower<\/strong> will pay for the <strong>valuation<\/strong> and the <strong>requested copies<\/strong> (which will not be necessary since the notary must send him a simple copy free of charge in accordance with the 8th DA anyway).<\/p>\n<div id=\"attachment_10004\" style=\"width: 310px\" class=\"wp-caption alignright\"><a href=\"http:\/\/www.shmadrid.com\/blog\/en\/wp-content\/uploads\/2019\/11\/signature-2003808_640.jpg\"><img aria-describedby=\"caption-attachment-10004\" loading=\"lazy\" class=\"size-medium wp-image-10004\" src=\"http:\/\/www.shmadrid.com\/blog\/en\/wp-content\/uploads\/2019\/11\/signature-2003808_640-300x199.jpg\" alt=\"man signing a contract\" width=\"300\" height=\"199\" \/><\/a><p id=\"caption-attachment-10004\" class=\"wp-caption-text\"><em>Photo via Pixabay<\/em><\/p><\/div>\n<p style=\"text-align: justify;\"><strong>3)<\/strong> It is obligatory to <strong>accept total or partial amortization<\/strong>, <strong>with commissions being limited<\/strong> and with <strong>no conditions other than in prior notice<\/strong>, <strong>not exceeding one month<\/strong>.<\/p>\n<p style=\"text-align: justify;\">Commissions may only be charged if the amortization represents a financial loss for the <a href=\"http:\/\/www.shmadrid.com\/blog\/en\/what-to-consider-when-choosing-a-bank-in-madrid\/\"><strong>bank<\/strong><\/a>. A maximum commission of 0.15% is established when changing from variable to fixed interest (which seems to be quite useless, since the new fixed rate must be agreed upon with the Bank anyway).<\/p>\n<p style=\"text-align: justify;\"><strong>4)<\/strong> <strong>Loans can only be declared overdue when 3% of the principal loan or the equivalent of 12 instalments have failed to be paid back during the first half of the total term agreed on, and 7% or 15 instalments if the non-payments occur in a later stadium<\/strong>. The moneylender must officially claim payment and offer a term of one month before declaring the loan overdue.<\/p>\n<p style=\"text-align: justify;\"><strong>5) \u2018Floor Clauses\u2019 are now prohibited<\/strong> (art. 21.3)<\/p>\n<p style=\"text-align: justify;\"><strong>6)<\/strong> <strong>The content of credit advertising is regulated<\/strong>, but above all the Law pays attention to <strong>the<\/strong> <strong>information on each specific loan to be given to the debtor<\/strong>: with a minimum and unwaivable period of 10 days, information must be provided with a basic structure in two documents.<\/p>\n<p style=\"text-align: justify;\"><strong>7)<\/strong> <strong>A compulsory pre-contractual notary involvement<\/strong> is introduced in <strong>Art. 15<\/strong> as a performance guarantee to check the fulfilment of all information obligations.<\/p>\n<p style=\"text-align: center;\"><strong>What is your opinion on these changes in mortgage law?<\/strong><\/p>\n<div style=\"display: none;\"\n    class=\"kk-star-ratings kksr-valign-bottom kksr-align-center kksr-disabled\"\n    data-id=\"10001\"\n    data-slug=\"\">\n    <div class=\"kksr-stars\">\n    <div class=\"kksr-stars-inactive\">\n            <div class=\"kksr-star\" data-star=\"1\">\n            <div class=\"kksr-icon\" style=\"width: 20px; height: 20px;\"><\/div>\n        <\/div>\n            <div class=\"kksr-star\" data-star=\"2\">\n            <div class=\"kksr-icon\" style=\"width: 20px; height: 20px;\"><\/div>\n        <\/div>\n            <div class=\"kksr-star\" data-star=\"3\">\n            <div class=\"kksr-icon\" style=\"width: 20px; height: 20px;\"><\/div>\n        <\/div>\n            <div class=\"kksr-star\" data-star=\"4\">\n            <div class=\"kksr-icon\" style=\"width: 20px; height: 20px;\"><\/div>\n        <\/div>\n            <div class=\"kksr-star\" data-star=\"5\">\n            <div class=\"kksr-icon\" style=\"width: 20px; height: 20px;\"><\/div>\n        <\/div>\n    <\/div>\n    <div class=\"kksr-stars-active\" style=\"width: 0px;\">\n            <div class=\"kksr-star\">\n            <div class=\"kksr-icon\" style=\"width: 20px; height: 20px;\"><\/div>\n        <\/div>\n            <div class=\"kksr-star\">\n            <div class=\"kksr-icon\" style=\"width: 20px; height: 20px;\"><\/div>\n        <\/div>\n            <div class=\"kksr-star\">\n            <div class=\"kksr-icon\" style=\"width: 20px; height: 20px;\"><\/div>\n        <\/div>\n            <div class=\"kksr-star\">\n            <div class=\"kksr-icon\" style=\"width: 20px; height: 20px;\"><\/div>\n        <\/div>\n            <div class=\"kksr-star\">\n            <div class=\"kksr-icon\" style=\"width: 20px; height: 20px;\"><\/div>\n        <\/div>\n    <\/div>\n<\/div>\n    <div class=\"kksr-legend\">\n            <span class=\"kksr-muted\"><\/span>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Today, this article by ShMadrid will focus on important information for anyone wanting to buy an apartment and applying for a mortgage. As most people who decide to buy property need a mortgage from their bank, it is essential for mortgage laws to protect future property owners. If you are thinking of buying a house [&hellip;]<\/p>\n","protected":false},"author":318,"featured_media":10003,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1565],"tags":[2191,2192,2190,124],"_links":{"self":[{"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/posts\/10001"}],"collection":[{"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/users\/318"}],"replies":[{"embeddable":true,"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/comments?post=10001"}],"version-history":[{"count":8,"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/posts\/10001\/revisions"}],"predecessor-version":[{"id":10121,"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/posts\/10001\/revisions\/10121"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/media\/10003"}],"wp:attachment":[{"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/media?parent=10001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/categories?post=10001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.shmadrid.com\/blog\/en\/wp-json\/wp\/v2\/tags?post=10001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}