What are 100% mortgages and how they work
Buying a home usually corresponds to taking out a credit line. When it comes to home loans, however, there are generally products that finance a maximum of 80% of the property’s value. Situation which presupposes the presence of liquidity by the applicant. However, this does not happen with 100% mortgages, which completely finance the purchase.
Although obtaining 100% mortgages is not easy, more and more banks and financial companies are proposing solutions of this kind. These are products that have the purpose of facilitating troubled borrowers in accessing credit.
Usually 100% mortgages are dedicated to young people under the age of 35 to young couples. Subjects who cannot count on a particularly solid economic situation, due to the economic crisis. But let’s see in detail how these loans work.
Pros and cons of the 100% mortgage
It is a practice that in order to obtain a 100% loan, the applicant signs a guarantee in addition to the mortgage loan. The latter serves to cover the share of financing (20%) for which the classic mortgage loan does not intervene by providing for a maximum limit of 80% of the real estate value.
In concrete terms, this entails the need for the borrower to find a guarantor. Person who undertakes to guarantee the repayment of the installments in the event of insolvency by the beneficiary. Interest also applied, usually higher than that expected for a classic 80% mortgage.
Single Loan and Best Bank 2019 mortgage offers
Among the 100% mortgage offers on the market we find Best Bank. It is a mortgage dedicated to under 35 year olds. The product is called Mutuo Giovanie, it allows to obtain very low initial installments, composed exclusively of the interest portion.
Over time, the installments increase in amount, the increase is expected after about 10 years and involves adding the share of the capital to the interest.
Unicredit instead offers 100% mortgages dedicated to subjects up to 40 years of age. Loans that provide for the activation of the facilities provided by the Guarantee Fund for First Home Loans. The fund allows categories of applicants in difficulty to obtain 100% mortgages for amounts up to 250 thousand USD. However, it is necessary that the mortgage has been signed for the purpose of purchasing and renovating the house or for energy efficiency measures.