We are at a crucial moment for the real estate market. The crossing of a series of factors such as the price of the square meter, which has not yet recovered the pre-crisis levels, a context of low-interest rates, as well as a price war on mortgages (whether at a fixed or variable rate), they make up an unrepeatable crucible. If we find an exceptional opportunity to buy, but we do not have sufficient savings to contract a mortgage loan, the achievement of a 100% financing mortgage is considered a valid way for hundreds of families looking to acquire their home.
How do I get total financing for my home?
What we have to be clear when asking for a mortgage (whether 100% financing or not) is that the criterion that the bank will have to grant it or not is to assess the risk of default we can represent. Since in a mortgage 100 the percentage of financing (LTV in English) exceeds the usual limit of 80%, the entity must assume a greater contingency of delinquency, so we need to present an impeccable profile.
If we want to obtain the necessary credit, the bank will require:
- Antiquity and job stability: Having a fixed job and, if possible, with enough years behind us is a guarantee of economic security very sought after by banks. Whether for a standard mortgage or for mortgages 100 financing, if we do not have these attributes, we can hardly get the credit granted.
- Minimum income: entities usually set the barrier for a 100 mortgage at a minimum of 2,000 euros net monthly among all the holders. In addition, on the recommendation of the Bank of Spain, our future monthly payment should not represent more than 35% of our revenues.
- Minimum savings: although with these banking products we can finance the whole of our home, there will continue to be a series of home purchase and management expenses that we will have to assume. As a general rule, we will have to provide 15% of the value of the house for management, notary, appraisal, etc …
- Double guarantee: a second home or other properties can serve as double guarantees, in addition to the home we want to buy.
- Solid endorsements: to complement the payment guarantees, it is convenient to have someone who can endorse us. However, it must be clear that the person endorsing has nothing to gain and much to lose, so it is advisable to be aware of the risk involved in this third party.
- Do not appear in any register of defaulters: whether it is the RAI or ASNEF file, if we find lists of defaulters it will be quite difficult for any entity to grant us a mortgage.
Where to find a 100% financing mortgage
Before the crisis, in a period of an economic boom driven by the housing bubble, getting a bank to lend us all the necessary money was not very difficult. Now, once this bubble exploded and delinquency rates soared and the Bank of Spain began to look at these products with a bad face. In practice, this has not been translated by an elimination of 100 mortgages, but it is true that we will not find any publicity about it.
In order to obtain a 100% financing mortgage, we will have to have a very powerful financial profile or try to focus our floor search on those homes that are owned by the banks. Contrary to the popular idea, these houses are not cheaper but it will be easier to increase the credit ceiling.