Hernan Zubel is a renowned lawyer on issues related to financial products that manages a reference blog on financial regulation and consumers called the Financial Market Law Magazine. Analyzing mortgage loans in 2019 and their foreseeable future, I have gathered my opinion in an interesting article entitled ‘ Mortgage loans, under an uncertain future ‘ that I invite you to read carefully.
On the other hand, if you are looking for a mortgage in 2019 and want to value the hiring of a mortgage broker, do not hesitate to leave us your contact information on our form .
Granting of mortgage loans in 2019
The bank continues to base its business model on the granting of mortgage loans, a credit product that allows it to link the client to be able to offer other products of the entity, when not directly forcing it more or less directly to contract related products, mainly sure. A prohibited practice that, however, is widespread. Article 15 of the Draft Law regulating real estate credit contracts in my view will not end the practice of the “forced” linked sale. What can be a tool to claim against this type of bad practices, if higher costs of the associated policies are still being charged.
This beginning of 2019 is accompanied by some fear that the economic moment will worsen, as reflected in the global CEO survey that PwC has presented in Davos. Related to these bad expectations, the forecasts of rising interest rates lengthen. It is difficult to know how this scenario will influence the granting of mortgage loans in Spain. In addition, there are other factors specific to the mortgage market, such as the decision of the Court of Justice of the European Union on IRPH, which may adversely affect.
In any case, I believe that the granting of mortgages in 2019 may slow down slightly compared to 2018, but we will not see a notable reduction in the rate of granting of credit linked to the purchase of residential properties.
Factors that will influence decisions on mortgage loans in 2019
A key factor is the perception that citizens have of the main competitor when buying real estate: rent. The increase in rental prices in urban and tourist areas, its poor regulation, which damages both landlords and tenants, together with the Spanish mentality that renting is throwing money (thought that seems to be taking root, if we look for example In the conclusions of the Fotocasa report ‘2017-2018 rental experience’), this will lead to the demand for mortgages to buy a house to continue increasing in 2019.
The next approval of the Law regulating real estate credit contracts will surely also have a positive effect on the decision to borrow, if it reaches public opinion that your rights as mortgaged are better protected.
Main Impact of Mortgage Law
The future standard provides significant improvements for consumers and freelancers who decide to buy a home, which can stimulate demand. On the supply side, when new obligations are imposed, or rather, new forms or mechanisms of compliance with these obligations, we may see a slowdown in the rate of mortgage firms after the approval of the law, until notaries, agencies and banks adapt.
A great opportunity to improve the figure of the mortgage broker has been lost, to which obligations are added but no tools are offered so that the mortgaged person can perceive their work as having greater added value and the bank considers it a relevant market agent , conditions necessary to provide competition to the sector. Law 2/2009 poorly regulates the figure and the next Law does not improve the legal position of the real estate credit intermediary.
Although expectations are of gradual rise, experts do not believe that the Euribor is above 1% for several years, which is a long period of low interest rates. Meanwhile, we will continue to see a powerful supply of fixed-rate mortgages by banks, pressured to offer good short-term results.