You may be mulling the idea of acquiring a Spanish property taking advantage of today’s ultra-low prices - but you need a mortgage loan. You may feel somewhat daunted and overwhelmed when you request information, and your lender sends you a huge pack of mortgage information full of esoteric banking lexicon.
Don’t worry, we’ve got you. In this short post we attempt to explain in layman terms what the main ones stand for, and why they are important to you, as a borrower.
FIPRE
Stands for Precontractual Information Pack (Ficha de Información Precontactual, in Spanish). All this fancy-worded acronym means really is just a general review of a mortgage loan’s terms and conditions. It should be stressed it is not binding and it is not personalised. The lender is at liberty to alter the advertised terms and conditions at any time without giving notice. Its usefulness comes into play on being used as a tool to compare it with other lender’s offers (FIPFREs), that’s all.
FEIN
This one stands for European Standardized Information Pack (Ficha Europea de Información Normalizada, in Spanish). This one is similar to the above, laying out the terms and conditions of a mortgage loan, but unlike the former it is actually contractually binding and is personalized for a prospective borrower. A FEIN is now the equivalent of what we understand in English as a lender’s Binding Offer and is time-limited (normally spanning 3 months). A lender, following new laws, is compelled to supply a borrower with at least 10 days in advance a copy of the FEIN before signing the Mortgage deed at a Notary. It includes useful information such as ‘portability’ of the loan to other lenders, how to desist within 14 days or how to make partial redemptions of the loan.
FIAE
The final one stands for European Standardized Warning Pack (Ficha Europea de Advertencias Estandarizadas, in Spanish). If it sounds scary, it is because it is meant to be. It is a mixed bag where they throw in all the common mortgage abusive clauses, official benchmark indexes to which a loan is indexed, early redemption penalties etc. Basically, it provides an overview on all the conflictive points which caused borrowers so much aggravation in the not-so-distant past on taking out a mortgage loan in Spain.
You’d do well to acquaint yourself with all three before you blissfully sign away on the dotted line. You’re welcome.