FINE: Learn how to analyze a credit proposal.
When buying a house with a housing credit, you may come across some terms that may seem confusing at first. If you have already started the process and the bank has given you a form called FINE, know its purpose and how to analyze it.
What does FINE mean?
The concept of FINE is an acronym for European Standardized Information Sheet. This sheet includes all the information that the consumer should know regarding details and conditions of a financial product, such as a mortgage loan.
What is the purpose of FINE?
FINE is a document used by European banking entities to reference all important information of a financial product. Since 2018, this document is governed by European standards, having a structure based on the same rules throughout the European Union. However, in terms of content, differences may be found in the FINE from bank to bank.
This document gathers information such as which entities are involved in the proposal, from the bank to the credit intermediary, if applicable, the characteristics of the credit, applied interest rates, details about monthly installments, associated products, early repayment, consequences of default, among others. You should pay special attention to this document because it details the amount you will pay for your credit.
If you need to make a comparison between banking proposals regarding your credit, FINE is where you should look. Ensuring the same structure across various banks, it is easy to compare the conditions between different credit proposals to understand which is most beneficial for you.
When do I get FINE?
The European Standardised Information Sheet must be provided by the bank to a consumer at two different times:
- During the simulation of a credit proposal, whether through a request made from an online simulator, a direct request; and at the moment of credit approval, in order to formalize all credit-related information.
This document has a validity of 30 days, from the moment the simulation is delivered, so the customer has time to analyze and compare proposals and make a decision. Even if the consumer makes a decision in the first few days, there is a mandatory 7-day reflection period after sending the simulation to formalize a proposal.
How to interpret the FINE?
Next, we proceed to demonstrate which informational points are presented in FINE and how to interpret each one:
1. Lender - Refers to the information about the banking entity that is granting the loan;
2. Main loan characteristics - Indicates the credit characteristics such as: financing amount, type of credit, interest rate, Total Amount Imputed to the Consumer (TAEG), guarantees required by the bank, and the presumed value of the property to be financed;
3. Interest rates and other costs - Includes the value of the Global Effective Charges Rate (TAEG), the Nominal Annual Rate (TAN), the commissions paid to the bank, and also information about the required insurances;
4. Payment periodicity and number of installments/Initial installment amount - In this section, there is complete information about the installments, periodicity, and monthly value according to the index (in the case of Euribor, it depends on the chosen term for it, for example);
5. Additional obligations - Refers to all the obligations that the borrower must fulfill in order to maintain the credit;
6. Early repayment - Describes the conditions if you want to repay the credit in advance;
7. Flexible characteristics/Consumer rights/Complaints - If the client wants to transfer the credit to another bank, for example, this part indicates the information about the flexibility to do so, what rights to inform the consumer, and the contacts if you want to proceed with a complaint;
8. Default/Consequences for the consumer - Here are described the consequences if the borrower is late in paying the credit installments, that is, the default interest rate to be applied;
9. Optional associated sales - Refers to the TAEG depending on the contracted products;
10. Repayment tables - Finally, you have access to a table with the expected values to be paid throughout the contract, that is, the repayment plan to the bank.
Two frames are displayed: one representing the values of the current hiring context, based on the current Euribor value, and another with a forecast of financial return if the Euribor rises to the highest value reached in the last 20 years.
To make a conscious and informed decision, the credit intermediaries of Poupança no Minuto can help you in the process of comparing proposals through FINE. Buying a house through a mortgage can be a headache, but if accompanied and advised throughout the process, it becomes easier. Thus, through a free service, you ensure that you have the best credit conditions for you.