When the days of wine and roses in Spain gave way to one of the biggest economic crises the country has experienced and from which it is still recovering, certain financial practices that could be considered as not quite orthodox came to light. There were few experts and economists who put their hands to the head for issues such as the granting of mortgage loans to people who later could not afford the monthly payments. There were a few years of economic boom in which if you entered a financial institution asking for money to acquire a home, it was very possible that you would leave it with an amount that even allowed you to acquire furniture and appliances. No sign of what is known as a responsible loan.
When the real estate bubble exploded and the crisis arrived, the shame of the financial system was exposed. The good part is that knowing the faults allows you to correct them , or at least try. That is what is intended to be done with the responsible loan.
In 2011, the Government published an order for transparency and protection of the banking services client. It states that before signing a credit agreement, the entity “must assess the ability of customers to comply with the obligationsarising therefrom.” To do this you must study the applicant’s income, credit history , employment status as well as the assets he has. In the same way, the level of income that you will have after your retirement is examined, if part of the credit you will have to continue paying when you get into this situation. In addition, these reviews will be carried out periodically even after the credit has been granted. What is intended with this measure is thatNo loans are granted to people who may have difficulty returning the money , damaging both their finances and the bank.
Other requirements of the responsible loan
If the banking entity decides to grant a responsible loan based on a real guarantee, such as a home, it must take into account that the maximum amount of the money it lends and the derived interest must be based “on the estimated capacity of the client to face to your payment obligations ”and not in the value of the guarantee. That is, nothing to happily give mortgages based on very high appraisals of homes with fees that the borrower will not be able to pay if his financial situation undergoes any change.
From the same ministerial order emanates the obligation of financial institutions to offer their clients sufficient explanations so that they understand the characteristics of the products offered and the risks that each of them entails. They also have to indicate the amount of the commissions that each financial operation entails and give them the possibility to withdraw from the operation without incurring any cost.