It is one of the most important documents you will receive before signing the mortgage. It contains all the key information about the loan you are applying for and is the offer that the financial institution must give you after having analyzed your profile. That is why it is important that you understand it and read it carefully.
What is FEIN?
The FEIN is the European Standardised Information Sheet, which, put like that, may not tell you much.
You will surely understand it better if we define it as the document that summarises the final conditions of the mortgage that the financial institution offers you after analysing the documentation you provided about your profile and solvency . This is what the FEIN consists of and it is one of the documents that the financial institution must give you on a mandatory basis, after studying your profile and approving your mortgage.
What is FEIN for?
The FEIN is introduced into the mortgage application process with the new mortgage law of 2019. Its purpose is to allow the client to have access to clearer and more transparent information about the mortgage offered to them and its conditions.
The European Standardised Information Sheet is delivered at least ten days before the date agreed to sign the mortgage and contains all the necessary data to be able to evaluate the loan and compare it with other offers.
That is the purpose of this document:
· Make sure you have no doubts about the conditions of the loan, including the total interest and how it will be paid.
· You can compare this mortgage with other offers.
· That the entity maintains the conditions of the mortgage loan.
What information will you find in the FEIN?
This is the first key information about the document. The FEIN summarizes the final offer from the entity and has detailed and personalized information about what your mortgage will be.
What is this information? This is the data you will find in this sheet:
· Lender details , which is the entity that grants you the mortgage.
· Intermediary details , in case you have used a mortgage broker or someone who helped you with the mortgage.
· Loan characteristics , which include data such as the currency in which it is signed (in euros, always better), the maximum amount of the mortgage, the duration, the type of credit (if it is a mortgage or another type of loan), the interest rate, the total amount of the mortgage (interest included), the guarantee (in a mortgage it will be the house), the percentage of the house that is financed (known as the loan-to-value ratio) and the minimum price of the house so that it can be financed.
· Interest rate and other expenses , where you will see the interest rate throughout the life of the mortgage and other expenses included in the APR .
· Frequency and number of payments , which summarizes when you will pay your mortgage installments and how many there will be.
· Amount of each installment . If it is a variable rate mortgage, you will see the amount of the installments with the current conditions and when they will be revised .
· Illustrative disbursement table , which is the mortgage amortization table .
· Other obligations of the loan , such as, for example, discounted products or mandatory home insurance . At this point, remember that there are mortgages without ties that may be worthwhile.
· Early repayment , which is the fee for full or partial repayment of the loan. In other words, how much you will pay to repay the mortgage early.
· Flexibility elements , which is information on how you can change your mortgage bank or subrogate it. Also if you will be able to increase the capital or the term of the loan or if there are grace periods.
· Other borrower rights , which include your rights regarding the mortgage. For example, the time you have from when you receive the FEIN until you can respond or whether you can withdraw from the mortgage once it is signed.
· Complaints and, more specifically , who you can contact with any complaints about the mortgage.
· Consequences of default for the borrower . In short, what happens if you stop paying the loan.
· Additional information, summarizing the applicable legislation.
· Supervisor , which reminds you that the Bank of Spain is the one that supervises the financial institution and how to contact it.
Is it binding?
One of the main characteristics of the FEIN is its binding nature, meaning that the financial institution is obliged to comply with the indicated conditions, and cannot make changes for a minimum period of ten days in Spain and 14 days in Catalonia.
These ten days are also the minimum period that must pass from the moment you are given the FEIN until you can sign the mortgage. If you need more time to think about or buy, it is possible to negotiate a longer period.
The FEIN is binding on the bank, not on you. During this time, the bank must maintain the conditions of the mortgage. Having received the FEIN does not oblige you to sign that mortgage, as if it were a kind of deposit contract .
FEIN, FIPER and FIAE. Are they the same?
FEIN can be confused with FIPER or FIAE, but they are different terms! Below, we explain the differences between them.
The FIPER is the Personalised Information Sheet and is the document that was provided instead of the FEIN before 2019. It contained less information and was not binding.
The FIAE is the Standardized Warning Sheet and complements the FEIN. It contains the necessary information on mortgage clauses and the costs of setting up the mortgage.
Both documents, FEIN and FIAE, contain all the information you need about your mortgage. If after reading them you have any doubts, you can always ask your bank or consult with the notary during your visit before signing the mortgage.
The important thing is that when you sign the mortgage you do so without hesitation and knowing what you are signing and its conditions. This is how you make informed and formed decisions.