When you are buying in Europe, you must learn about the law in force in the country concerned.

Since December 23, 2016, a new directive (MCD) has been put in place for Europe.

This directive aims to unify European regulations on the real estate market in a transparent and competitive manner.

Three points have been addressed in this new reform: 

• Pre-Contractual Approach

Before signing the loan agreement, it is better to ensure that everything is in order to secure both parties.

For this reason, three steps are required to be followed in the process to be adopted.

Firstly, the financial institution inquires about possible credit solutions.

Then, the latter will be in charge of customizing the loan proposal in relation to the conditions of the borrower.

Finally, the borrower will provide the bank with a European Standardized Information Sheet (ESIS) under the best conditions.

With this form, the borrower will be able to compare the different loan offers that are currently in the market to make the best possible decision.

• Reflection Period

Ensure that once the contract is signed, you always have a period of reflection. This may differ depending on the country where the loan is contracted.

For Luxembourg, you have 14 days before your contract is validated.

• Early Repayment

It is now possible for individuals to make use of early repayment.

This option is possible under specific conditions in Luxembourg, namely whether the loan is related to an effective and main residence for an uninterrupted period of at least two years.

Note that the Luxembourg law of December 23, 2016 is applicable to contracts concluded since March 21, 2016.

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