The Government approved on May 9 public drinks with which they intended to alleviate the problem of access to housing for young people and families with dependent children.
Specifically, this measure consists of launching a line of guarantees from the Official Credit Institute (ICO) that will correspond to 20% of the value of the home, except in some cases the decrease may amount to 25% if it is a strong rating d
As a general rule, to access the purchase of a home you must give an entry to the bank of 20% and it is this who grants a credit worth 80%. This implies that any citizen wishing to buy a home must have a certain level of savings. The measure approved by the Executive implies that it is possible to obtain 100% of the financing and that initial savings will not have to be provided.
Are mortgages with ICO endorsement lacking?
In the first place, it must be taken into account that in addition to the value of the property, and of that 20% savings, the buyer also has to contribute another 10% corresponding to management expenses.
Ángel de la Fuente, executive director of Fedea, explains that the first thing to take into account with this measure is that "the ICO guarantee does not exempt you from paying" so whoever wants to access this type of mortgage must take into account that the value to return will be 100%.
However, it specifies that "it will be the bank" who sets the conditions of that mortgage and makes the calculations that will finally determine if they are more expensive in practice. In this sense, it is understood that there will be a "general agreement" between the entities, although as the measure is recent, no further details have yet been specified.
On the other hand, from the iAhorro mortgage comparator they explain that by obtaining a 100% mortgage the repayment fee will be more expensive. They assure in a sample of a living room of 180.000 euros, where the accountant will assume it will be the sober mortgage 144.000 because the restaurant assumes it from their savings. However, when financing the entire purchase, the installments will be calculated over 180.000 euros and that will be the reason for the increase.
What happens in case of non-payment?
As a consequence of this obligation to pay, De la Fuente indicates that the ICO will answer to the buyer before the bank, but "later it is possible that the Official Credit Institute will ask the buyer to be held accountable."
If there is a default before the ICO loan, there may also be a default with the bank for that remaining 80% loaned, in which case it will be the entity that takes the necessary measures.
Who can apply for ICO guarantees?
To be able to apply for these swallowes, applicants must be under 37 years of age and earn less than 37.800 euros gross per year, and if they are a couple, both must be of age to qualify for the measure and have, between them, a gross income of 75.600 euro
Families with dependent minors may also be accepted and in this case the gross income that they must prove depends on the type of family (single parent or not) and the number of children.
Regarding the banking warning that a new bubble should not be generated, the executive director of Fedea specified that "there is a slightly lower risk but not imminent", as well as that the banks will take into account "that there is a part of public support ”. Ángel de la Fuente understands in this sense that some mortgages could be granted that otherwise would not be made, but that the risk of a bubble also implies that banks follow a trend such as that generated in the last real estate crisis.
