Act of transparency: what questions will the notary ask you to grant the mortgage?
These are the questions that you will be asked in the transparency act at the notary. Study the conditions of your mortgage to pass this exam
A few days before the signing of the mortgage, in order for the borrower to know the details of the contract that he is going to sign, he must carry out a notarial test. This test is mandatory. The reason? Detect that there are no errors or abusive clauses in the mortgage loan contracts (such as floor clauses or hidden fees).
To carry out this notarial test, which is rather an advantage for the loan applicant, since it allows them to know the details of the loan and understand all its points, it is necessary that they first review the conditions of their mortgage . It will be essential to thoroughly study all its conditions for two reasons. Firstly, pass the test and, secondly, make sure that you are signing a contract without errors or unfair terms.
To make it easier for you, we bring you the cheat sheet with all the questions that will be asked in the so-called transparency act, the document that you will have to fill out at the notary. In the current mortgage law, the figure of the notary is to advise the borrower as objectively as possible, in order to avoid fraud and lender abuses such as those sadly committed in the past.
What do you need to bring to go to the notary? What questions will he ask you? Let's start!
Task of the bank: deliver all the documentation
To guarantee that the entire process is transparent for the loan applicant, the entity must have sent or delivered the following documents:
- The European Standard Information Sheet (FEIN). It is the one that tells you the credit conditions, as well as the amount requested, interest, commissions…
- The Standardized Warning Sheet (FiAE). This document will explain in detail the most complicated clauses
- The copy of the draft of the contract. With this document, the notary will be able to generate the deed of your new home
- The document containing the insurance information
- For variable mortgages : the document containing the warning of being obliged to receive notarial advice
- The document with the payment of fees in different scenarios
The notary will ask you if you have received this documentation, so to get to know each document, it is interesting that you have them checked before going to sign the mortgage before a notary. Keep in mind that, once the FEIN is signed you should make an appointment with the notary. It could take several days to sign your mortgage at the notary, although this process could take more or less depending on each personal situation.
Act of transparency: the questions that the notary will ask you
The notary will make you fill out a test in which you must indicate that you have received the above documentation and that you know the characteristics of the loan. These are the questions that the notary will ask you before signing the mortgage.
Before the test, the notary will explain all the points. However, it is important that you know them in advance to be able to compare between various mortgages.
1. Delivery of pre-contractual documentation
1.1.- Do you confirm that you received the following documentation on the day stated in your statement?
- a) FEIN YES/NO
- b) FiAE YES/NO
- c) Copy of the draft contract YES/NO
- d) Document containing information on expenses YES/NO
- e) Document containing the conditions of the insurance guarantees required YES /NO
- f) Document containing the warning to the borrower of the obligation to receive notarial advice (only in the case of loans with variable interest) YES/NO
- g) Document referring to the instalments in different scenarios of interest rate evolution YES/NO
1.2.- Has the entity explained the content of the indicated documents and answered your questions? YES/NO
2. Choice of notary
2.1.- Did the financial institution inform you that it was you who had the right to choose a notary? YES/NO
2.2.- Do you confirm that I am the chosen notary? YES/NO
3. Characteristics and amortization of the loan
3.1- Do you know the capital and duration of the loan, and the amount and periodicity of your installments? YES/NO
3.2.- Did you know that each of the installments comprises a part of the principal of the loan and another part of interest? YES/NO
4. Interest rate
4.1.- The interest rate you have been offered is fixed throughout the life of the loan or is expected to change at some point. FIXED/VARIABLE
4.2.- Are there interest rate discounts in your offer in the event that you contract certain products with the lender or entities indicated by him? YES/NO
4.3.- In the case of a fixed interest loan, do you know that you will not benefit from a future drop in the market reference rates? YES/NO
4.3.- In the case of a variable interest loan,
- a) Are you aware that future interest is calculated by adding a differential to the agreed reference interest rate? YES/NO
- b) Do you understand that the reference interest rates vary over time and that this variation could lead to an increase in the installment? YES/NO
5. Creditor subrogation
5.1.- Did you know that you can change lenders through a procedure called subrogation that entails full early repayment of your loan and has tax and tariff discounts? YES/NO
6. Early repayment of the loan
6.1.- In the offer made by the lender, is there a commission for early repayment?
- In case of total repayment: YES/NO
- In case of partial repayment: YES/NO
- In case of change of lender (creditor subrogation): YES/NO
6.2.- You understand that this commission, if it exists, can only be charged if the early repayment produces a loss for the lender, which must be justified. YES/NO
7. Commissions
7.1.- Does your loan have:
- Commission for opening YES/NO
- Commission for modification of conditions (novation): YES/NO
- Commission for claiming unpaid installments: YES/NO
8. Breach
8.1.- Have you understood that in the event of non-payment you will be charged the legally established default interest on the amount that you have failed to pay? YES/NO
8.2.- Have you understood that if the non-payment reaches a certain amount, the financial institution can declare the loan overdue early and claim the entire amount owed from each of the borrowers? YES/NO
9. Foreclosure
9.1.- Do you understand that non-payment of the loan may lead to the loss of the mortgaged asset and its sale at public auction? YES/NO
9.2.- Are you liable for this debt with all your assets, present or future, or only with the mortgaged asset? WITH ALL THE ASSETS/ONLY WITH THE MORTGAGED ASSETS
9.3.- Do you understand that if you respond with all your assets and the value obtained in the auction of the mortgaged property is less than what is owed, you will continue to owe the difference to the lender? YES/NO
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