The notarial deed prior to the formalization of the mortgage loan, commonly called the transparency act as it has the objective of complying with the requirement of material transparency, is regulated by article 15 of the Law 5/2019, of March 15, regulating real estate credit contracts. It is a notarial document that guarantees that the person or persons who are going to sign the mortgage loan have received all the necessary documentation and information to be able to understand the scope of the obligations they are assuming. The Notary will inform individually of the conditions of the mortgage loan that you are going to subscribe, and clarify all the doubts you may have. The documentation that will have to be explained in the minutes prior to the formalization of the mortgage loan is the following:

1- The FEIN (European Standard Information Sheet)  

It is the document that records all the information regarding the loan, and that will be considered a binding offer during the time it is established in it. The FEIN must include, among others:

  1. The general information of the bank granting the mortgage
  2. Documentation about the credit intermediary if there is one
  3. The main characteristics of the loan such as the total amount of the loan, the interest rate that is applied and how it is deducted from the capital through the amortization tables
  4. Information regarding the periodicity and number of total loan payments
  5. The amount of the monthly installments and their variation depending on the interest rate
  6. Data on the conditions of the early repayment
  7. Information on how and where you can claim
  8. The consequences of not complying with the provisions of the loan

2- THE FIAE (Standardized Warning Sheet) 

It is a complementary document to the FEIN that has the objective of expanding information in relation to the most relevant and important clauses. Among others, the clauses relating to the limitation of the lowering of interest rate variability (the famous floor clauses), the possibility of early maturity and the costs it would entail, the implications on the monthly fee of a rise in the interest rate if or the risks of loans in foreign currency. 

3- Document that makes special reference to periodic installments in different interest rate evolution scenarios

This document will be provided in the case of a variable interest rate loan. It is a separate document with a special reference to the periodic payments to be paid by the borrower in different scenarios of interest rate evolution, a simulation of the mortgage payments according to the evolution of the interest rate in different scenarios. 

4- A copy of the contract project

It must reflect the content of the information expressed in the three documents explained above. It must also include all the expenses associated with signing the contract. 

5- Conditions of insurance guarantees

If the credit institution requires the consumer to contract an insurance policy to guarantee compliance with the obligations of the contract, or to subscribe to a damage insurance with respect to the property subject to the mortgage and the rest of the insurance provided for in the market regulations mortgage, must deliver to the borrower in writing the conditions of the insurance guarantees required. 

6- Document that breaks down the expenses that correspond to the lender and those that correspond to the borrower

In general, the expenses related to the notarial fees, management and registration of the guarantees in the property registry will be assumed by the bank. The borrower will have to assume the costs of the property appraisal and the appropriate copies of the public deed. 

To have more information in relation to the documentation that must be provided to formalize a mortgage loan, click here. 

Warning: the documentation to be provided in each deed may vary depending on the particularities of each case. We recommend that you contact our notary for personalized information.

7.-Notary fees

The notary fees They are the means by which the notarial function is remunerated and the system with which preventive legal security is financed.