How to get a 100% mortgage financing

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.

Is it possible to get 100 financing mortgages again?

The situation of the Spanish real estate market distills a market full of opportunities. The years of the drought of credit and mortgages with inaccessible requirements are behind. Along with the drop in the price of the square meter, the war of prices of mortgages experienced between 2015 and 2016 has left a panorama full of possibilities. There are many people who start thinking about buying a home and wonder about those mortgages that financed the entire purchase. Are there still 100% mortgages?

Do they exist or not?

The short answer is yes, although the full version includes some “buts “. Yes, it is possible today to sign a housing loan with 100% financing. However, these are products that we will not find labeled with big letters in the entities’ showcases, like before the crisis. It was precisely in the explosion of the real estate bubble when it was possible to appreciate that this type of loans came to have a delinquency rate that multiplied that of the normal mortgages. That is, the risk of default on a 100% financing mortgage is greater than that of a normal mortgage.

On the other hand, this does not mean that they disappeared from the map. Mortgages 100% have seen their scope reduced mainly to mortgages for bank floors. Given the ballast that puts the accumulation of housing in the portfolios of banks, the entities will be willing to improve financing conditions for the external real estate. Among these improvements, we can find a higher percentage of financing.

Mortgages 100 can also be contracted by those people who have a level of liquidity and a stability to work bombproof. Precisely, if we can convince the bank of the reliability of our payments, the risk of default will be less and we can access greater advantages over our mortgages: either by requesting more capital, either because it has a lower interest or through 100% financing on the sale.

However, a product that seems to have completely disappeared are 100 mortgages plus expenses, mortgages that could finance up to 120% of the value of the sale, by including a higher amount to cover the cost of deeds (now in litigation). ) or for a possible reform that took place when entering the house.

How are mortgages 100%?

Removing the main fact that this type of loan increases the limit of financing that we can get for our home, mortgages 100 are practically the same as mortgages to use.

As differences, we could point out that the total financing mortgage loans can offer a term of up to 40 years, higher than the usual 30. It is also possible on some occasions that we are forced to take out payment insurance as a requirement of the entity to guarantee the payment of the installments, given that it is a product with a higher risk.

Despite the above, mortgages that only finance up to 80% can also extend the term to 40 years, as well as imposing the same level of connection , so if we can avoid increasing that 20%, we will be hiring a loan conventional mortgage that will be cheaper, is requesting a smaller amount of capital.