Signing a mortgage is one of the most important financial decisions people can make in their lifetime, yet the process of obtaining one can sometimes be overwhelming and expensive. There are many documents that need to be reviewed and understood before signing the contract and one of the most important is the European Standard Information Sheet or ESIN.
In this article we will explain what it is, what it is for and what it contains in the mortgage ESIN, a document that is worth knowing if you are considering the possibility of applying for a mortgage. Continue reading and discover all its details.
What is the ESIN of the mortgage?
It is a document that contains clear and complete information about the terms and conditions of the mortgage and that the lender provides to the mortgage applicant after having analyzed his profile and just before the signing of the contract. Basically, ESIN can be understood as the final offer that the bank delivers to the client regarding the mortgage they have negotiated.
After the real estate bubble, an attempt was made to resolve the mortgage concession conflict by incorporating more information and new official documents into operations. Since the entry of the new mortgage law of 2019, the ESIN replaces the FIPER as the last informative document, with the character of a binding offer, after the presentation of the FIPRE, which we will talk about later.
What is the ESIN of the mortgage for?
It serves to protect consumer rights and ensure that the process of obtaining a mortgage is transparent and fair. In addition, the ESIN also helps to ensure that there are no unexpected surprises in the future. Since the document must be provided by the lender, this allows the applicant the opportunity to carefully review the terms and conditions of the mortgage.
What does the mortgage ESIN contain?
The ESIN of the mortgage (remove keyword) contains important information about the mortgage, including the interest rate, the duration of the loan, the monthly payments and any other fees related to the mortgage. It also includes information about conditions, such as the possibility of early repayment and penalty conditions for late payments.
It is important to mention that the information found in the ESIN of the mortgage may vary depending on the country and the financial institution that grants the loan. Therefore, it is important to read the mortgage ESIN carefully before signing the contract to ensure that all the terms and conditions of the mortgage are understood.
In addition to the conditions, the bank has to make a report on the credit and the degree of solvency of the client requesting the loan, since there is something very important to project, such as the impact of positive information on credit. The latter is not something new, since it is an idea that we have already discussed on the blog and that must always be taken into account when opting for new financial products.
Along with the main characteristics, the bank must inform them of the right to choose a notary, who will verify that the company not only provides the client with all the pertinent documentation, but also that it does so in an adequate period of time. In this case, the notary will meet with the client to answer his questions and explain the most relevant aspects of the contract.
Difference between ESIN and FIPRE
As we already explained in our blog, FIPRE is also a document that banks are obliged to deliver when we talk about mortgages, but this time it is given in the first contact and not as a last offer. In the Pre-contractual Information Sheet only the generic conditions that the entity offers its clients appear as guidelines so that they can compare other options.
Therefore, we are talking about a document prior to binding offers, which provides us with a general image of the operation and helps us to compare other mortgages. In this way, the conditions that we proceed to assess in this way help us to negotiate with the credit institution and find the product that best suits our needs. Thus, an agreement can be reached to make the final conditions more flexible.
In addition, this document, which replaces the classic brochure that began to be used in the 90s, outlines a report on generic interest rates, linked products and responsible lending. In addition, in the event that they exist, so will the ceiling and floor clauses.
Summary and conclusions
In summary, the mortgage ESIN is a document and, at the same time, an important tool to protect consumer rights and guarantee that the process of obtaining a mortgage is transparent and fair. It contains valuable information about the terms and conditions of the mortgage that it is important to review carefully before signing the contract.
If you are interested in knowing more about the details to take into account regarding mortgages, we recommend that you carefully read our blog article that talks about whether you can put a personal loan in the mortgage.
