To clarify any doubts, we have rescued the article that shaped this document.
Article 21 Pre-contractual Information Sheet
- Credit institutions must provide customers who request these services with clear and sufficient information on the loans they offer. This information is provided for guidance through the Pre-contractual Information Sheet (FIPRE), at no charge. An example is shown in Annexe I.
- The Pre-contractual Information Sheet is available to loan customers, free of charge, through all of the entity's marketing channels.
When you apply for a mortgage, the bank or financial institution must provide you with this information document, clearly explaining its personalised mortgage offer. This document was created to replace the traditional information brochures found in banks and, in particular, to be totally transparent about the mortgage conditions for customers.
What information does the Pre-contractual Information Sheet contain?
- Information on the bank
The name of the bank or financial institution and its telephone number, registered office and website. It establishes who is the adviser or the competent authority for supervising the mortgage services. It also provides contact information so that the customer can locate the person responsible for the process.
If the mortgage is being managed remotely, the bank will also indicate the Commercial Registry where it is registered and its registration number, or alternative means of identification in the Registry.
- The loan characteristics
This section explains the maximum loan available as a result of the property appraisal.
- Purpose of the loan
If the mortgage is granted, the borrower must specify if it is for their main home, second home, for building work or refurbishment, or for other purposes.
- Description of the class type
This will clearly indicate how the principal and interest will be repaid.
If the loan is in a currency other than the legal tender in the country, the currency to be used will be shown. Interest payments may fluctuate in response to changes in exchange rates.
- Interest rate
This section specifies whether the mortgage has a fixed, variable or mixed interest rate. If the mortgage has a variable or limited variable interest rate, the part corresponding to the benchmark interest rate and the part corresponding to the spread applied by the bank will be made clear.
- Linkage and preparatory expenses
Any additional products and services that must be contracted with the loan for it to be approved under the conditions offered. It should also cover the appraisal of the property and who pays for this.
The APR and total cost of the loan, penalties and early repayment methods, and the transparency regulations for financial institutions under the current Mortgage Act.