FINE: Learn how to analyze a credit proposal
When buying a house with a mortgage, you may come across confusing terms. If you have started the process and the bank has given you a sheet called FINE, understand its purpose and how to analyze it.
What does FINE mean?
The concept of FINE is an acronym for European Standard Information Sheet. This sheet includes all the information that the consumer must know regarding details and conditions of a financial product, such as a housing loan.
What is the purpose of FINE?
A FINE is a document used by European banking entities to reference all important information about 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 can be found in the FINE from bank to bank.
This document gathers information such as the entities 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. In other words, you should pay special attention to this form because it details the amount you will pay for your credit.
If you need to compare banking proposals on your credit, it is FINE that you should look at. Once it guarantees the same structure in various banks, it is easy to compare the conditions between various credit proposals, to understand which is the most beneficial for you.
When do I get the FINE?
The European Standardised Information Sheet must be provided by the bank to a consumer in two moments.
- When simulating 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 information related to the credit.
This document has a validity of 30 days, from the moment the simulation is delivered, so that the client has time to analyze and compare proposals and make a decision. And even if the consumer makes a decision in the first few days, there is a mandatory 7-day reflection period, after the simulation is sent, to formalize a proposal.
How to interpret FINE?
Next, we proceed to demonstrate which information points are presented in the FINE and how to interpret each one:
1. Lender - Refers to information about the bank entity granting the loan; 2. Main characteristics of the loan - 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 Charge Rate (TAEG), the Nominal Annual Rate (TAN), the commissions paid to the bank, and also information about the required insurances; 4. Payment frequency and number of installments/Initial installment amount - This section provides complete information about installments, frequency, and monthly amount depending on the indexing (in the case of Euribor, it depends on the chosen term, for example); 5. Additional obligations - Refers to all 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 early; 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, the rights to be informed to 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 delays payment of the credit installments, that is, the default interest rate to be applied; 9. Optional associated sales - Refers to the TAEG based on the contracted products; 10. Refund tables - Finally, you have access to a table with the expected values to be paid throughout the contract, that is, the repayment plan of the financing to the bank.
Two charts are displayed: one representing the values of the current hiring context, based on the current Euribor value, and another with a forecast of the financial return if the Euribor rises to the highest value reached in the last 20 years.
To make a conscious and informed decision, credit intermediaries from Poupança no Minuto can help you in the process of comparing proposals through FINE. Buying a house through a housing credit can be a headache, but if you are 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.
👉 Try our free simulator now and find out in a few minutes how much you can invest in buying your home.