The constitution of a mortgage involves the payment of a series of expenses that go beyond the payment of the monthly payment. Until the approval of Law 5/2019 regulating real estate credit contracts, most of these were assumed by the buyer. With the new regulations, the situation has changed significantly.
In this post we explain who pays what when a mortgage loan is signed.
Expenses involved in signing a mortgage
Notary. Payment of the notary’s fees for attesting to the formalization of the mortgage operation.
Appraisal. Expenses derived from the process by which the value of a property is certified. The appraisal is carried out by a company approved for it.
Agency. They are the expenses related to the processing of the documents associated with the formalization of the mortgage loan.
Registration of the mortgage loan in the Land Registry. The fees for registering the property vary between 0.1% and 0.3% of mortgage liability.
Tax on Documented Legal Acts. You will pay one amount or another depending on the Autonomous Community where the property is. This tax is levied on acts formalized in public deeds.
Expenses that correspond to the client and expenses that must be paid by the bank
The buyer of the home must assume the following expenses:
- Appraisal. The client can choose the appraisal entity he wants and can use the report of that property to present it in different banks. The price varies from 150 euros to 400.
- Copies of the public deed. Its value is around 50 euros.
- Home insurance.
- Mortgage opening fee if any.
- Simple note to check the registration status of the property.
The expenses that correspond to the bank are the following:
- Notary.
- Registration in the Land Registry.
- The agency.
- Tax on Documented Legal Acts.
What about expenses paid before June 2019?
Before the mortgage law of 2019, most of the expenses associated with a mortgage were assumed by the owner of the same. For two years the Supreme Court, through several judgments, has given the client the possibility to recover 100% of some of these payments if the clause by which the payment is considered abusive. For this, the judge must consider it null and void and also the limitation period cannot have expired (on this matter there are different opinions of what it should be).
In any case, if you have formalized your mortgage before June 16, 2019, the day of entry into force of the law, you have the right to claim from the bank with which you signed it the expenses you assumed at the time.