What regulation exists in Spain
In Spain it had not necessary for a mortgage adviser or a mortgage advice company to be regulated. Whilst there are still no exams which an adviser must pass under new regulation all brokers who can place and negotiate with Banks oj your behalf will have to register with either the region they operate in or with the Bank of Spain, if they cover more than one region, and provide the regulator with evidence of knowledge, professionalism and financial integrity.
Does having exams like FPC from the UK mean anything in Spain
Many advisers in Spain promote the fact they have the necessary exams from their country of original residency. This provides no protection for the client, nor does it in anyway demonstrate a level of expertise in the Spanish mortgage market. Only providers with the Spanish exam requirements are regulated to negotiate with Banks on your behalf.
What obligations does a company arranging mortgages in Spain have
From June 2019 all providers offering full mortgage placement facilities will need to register with either their regional government or the Bank of Spain.
Mortgages in Spain are written into a deed. This deed is signed in front of a Notary who will have to after June 2019 assume responsibility to ensure the mortgagee understands the product and the deed they are signing. It is implicit once signed that the person signing it understood fully the document they were signing, the terms and the longer term consequences.
How do you know you are getting good advice
As with any large financial transaction it is important that anyone taking on a Spanish mortgage has had a full explanation of the product, have been warned of possible future implications, and has had all the details outlined in their own language. This is important to enable the applicant to be able to check when they get to Notary what they are signing is what they expected and that they have a good understanding of it.
Do not sign a mortgage deed in Spain unless you are completely happy that you understand what you have been offered and any future restrictions you may have. By law now you will be provided from the lender a much more detailed general information sheet and a FEIN which will be specific to the loan you are taking.
What will a good Spanish Mortgage provider offer you
Any individual who can provide you with authorised mortgage placement will be registered with the Bank of Spain will have undertaken the necessary exams and will provide their registration number, address and hold liability insurance. IMS ensure you have access, when making an application, to a regulated individual. You will obtain before an application is made to a lender a written illustration with the general terms and conditions and options you have. You will have access to the majority of the market, they will discuss with you the mortgage product type and compulsory products you are happy to contract. Our initial generic guidance outlines the product key features, its term, the full costs you can anticipate and also identifies points a client should consider when thinking of applying for a loan in Spain »
What are the key points that should be carefully considered when taking a mortgage in Spain
One of the key points of a mortgage in Spain is that, unlike in many other countries, in Spain if you are not happy with your lender, and or, more competitive products are available at a later date at present lenders do not have re-mortgage products . Lender hopping for a better deal on a regular basis is not practical in Spain so once you have signed your mortgage deal it is most likely you will need to stick with that Bank until it is paid off. The new law from June 2019 makes it cheaper and obliges however, your existing lender to change your product to a fixed rate in the future should you require this is the case.
What other considerations should I make
You should ensure you have been informed what compulsory products are linked to the loan rate you are being offered, what the rate will be if you do not take compulsory products and what happens if for any reason you cancel them. If you want flexibility for the future you need a clear view of what opportunity you will get to overpay the loan and what the penalties are. The June 2019 Mortgage act now prevents lenders from stopping you paying early and only requires you give the Bank one months notice of your intention to do so. Early payment penalties have also been significantly reduced.
How do I ensure I am protected
A mortgage adviser who is experienced in Spain is a must the person who is assisting you through the application process must have passed a statutory exam. There are sufficient differences in Spanish lending to mean that in inexperienced individual despite having the exam could badly advise you even if they are registered with the authorities. You should check how long the individual has been arranging mortgages in Spain, do they have a company or work on an individual basis, and are they able to offer advice over all areas of possible solutions and how many Banks do they work with.
A Company that has been trading for many years and is an SL (limited company) may provide you with a better level of protection than someone who works on an autonomo (sole trader) basis.
Should I pay fees upfront
Because of the volatility of the Spanish Mortgage market and the fact that lenders will negotiate to to secure quality clients a good broker in Spain will never make upfront charges. Access to a fully underwritten fiscal approval is provided for no cost.
Check what other clients saying
Before selecting a Spanish Mortgage company you should check there are no negative comments on the internet and look at what past customers have said about the service they offer.