People between 18 and 35 years old encounter many difficulties in obtaining financing and being able to buy a home. But all is not lost, they can get 95% financing, which will allow them to obtain a mortgage even without having too much savings.
Generally, credit institutions tend to finance up to 80% of the value of the home, so it is essential to have that remaining 20% ??saved, as well as the extra 10% represented by the purchase and sale expenses.
According to the state report of the Spanish Youth Council carried out in the first quarter of 2023, only an average of 28.7% of young people between 18 and 35 years old have been able to buy a home through financing. This is because for this sector of the population, access to a property through mortgage financing costs them 55.25% of their salary.
But all is not lost, because obtaining greater financing is feasible. Currently, several banks offer to finance a higher percentage, a factor that allows young people to be eligible to reach 95%, of course, meeting some requirements. But fear not, there are fewer of them than you think.
As Joan Balasch, Housfy’s Mortgage Operations Manager, clearly states, the buyer must have a stable job, in which they have worked for at least 2 years – if there are two buyers, at least one of them will have to comply said requirement -, and that the annual gross income is, at a minimum, 22,000-25,000 euros between the two buyers.
It is true that it can be somewhat complicated to get a 100 mortgage, but not impossible. According to the Housfy database, one of the leading mortgage brokerage companies in the country, of its total mortgages processed in 2023, 3.74% were 100 mortgages, and what’s more, in the last quarter of the year, 75% of mortgages with 100% financing went to young people.
To be able to access this type of financing, financial institutions will ask you as essential requirements, in addition to the job stability mentioned above, to have a debt capacity of less than 37% – keep in mind that the ratio of young people is between 35% and 40% – and that the value of the new home exceeds 200,000 euros.
It goes without saying that, exceptionally, you can also opt for 100% financing plus expenses, that is, complete financing, since it also covers the expense of the purchase and sale. To do this, you will also be required to have an additional guarantee.
Any negotiation with banks is an arduous task, but getting a mortgage with a high financing percentage is even more so, since you must demonstrate that they do not assume a high level of risk when granting you the loan.
Therefore, the best option is to have a mortgage broker. While it is true that their services may carry a price, this is nothing compared to the savings you can get on your mortgage. A broker is in charge of looking for the best interest rates and negotiating with financial institutions, to get you the mortgages that best suit your needs, achieving a 100 mortgage.
Access to property by young people continues to be one of the pending issues for administrations in Spain. Consequently, now in 2024, three mortgage grants for young people have been launched, both at the state and regional levels.
Young people between 18 and 35 years old who buy their first habitual home will be able to benefit from a subsidy of 20% of the price of the home, with a limit of 10,800 euros. As conditions, the buyer must have a maximum income that does not exceed three times the Multiple Effects Public Income Indicator (IPREM), that is, 25,200 euros gross per year at most in 14 payments; You will not be able to own another home in the country, and the new address must be located in a municipality with a maximum of 10,000 inhabitants.
The State will guarantee 20% of the price of young people’s first homes, so that banks can facilitate 100% financing for those with incomes of less than 37,800 euros gross per year. Additionally, as extra advantages, if the purchase of the first home is made between two people, the income limit will be double, and the age limit of 35 years will be eliminated if there are dependent minors. This guarantee was already announced in May 2023, but now, finally, it will be effective starting this month of February, as announced by the Minister of Housing, Isabel Rodríguez.
Finally, some Autonomous Communities also want to provide aid for young people who want to purchase a home. Mostly, they will guarantee between 15% and 20% of the mortgage and will offer discounts on purchase taxes, such as the Tax on Legal Acts (AJD) or the Property Transfer Tax (ITP).
