In many countries mortgage advisors are highly regulated but this is not the case in Spain. It is not necessary for a mortgage advisor or a mortgage advisory company in Spain to be regulated, there are no exams which an advisor must pass and no regulatory body to which they must report.
Companies arranging mortgages in Spain have very few obligations. The mortgage deed is signed in front of a Notary who will ask whether 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.
It is important that anyone taking on a mortgage in Spain has had a full explanation of the product, 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. Do not sign a mortgage deed in Spain unless you are completely happy that it reflects what you are expecting and that before you sign the information has been fully explained.
A good advisor will reflect in the information they give, the same level of detail they would in a regulated environment, be required to provide. At LIONSGATE CAPITAL we provide a written quote which includes everything the client needs to know. Our quotes outline the product, its terms, the full costs and also identifies points a client should consider when thinking of applying for a loan 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 it is neither cost effective nor good advice to move lender or product. Changing to a better deal is not always practical in Spain so once you have signed your mortgage deal it is most likely you will need to stick with that product and Bank until it is paid off.
You should ensure you have been informed what compulsory products are linked to the loan you are taking and what happens if for any reason you cancel them. You need to know whether the loan in Spain has a minimum rate known as a floor rate or has enhanced first year interest rates. If you want flexibility for the future a clear view of what opportunity you will get to overpay the loan and what the penalties are is essential.
A mortgage advisor who is experienced in Spanish mortgages is a must. There are sufficient differences in Spanish lending to mean that an inexperienced advice company could badly advise you. You should check how long the advisor 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) will provide you with a better level of protection than someone who works as an independent advisor. Because of the volatility of the Spanish Mortgage market a good advisor in Spain will never make upfront charges. At Lionsgate Capital we provide all our advice, guidance and full financial approval service without cost, as our fee is a success fee paid upon completion at the notary.
Please contact our team of experts for further information.