With the demand for housing growing exponentially, banks want to take advantage of the new scenario to boost mortgages lending. Relaxing the approval criteria.
The current conditions can lead to a 23% increase in the number of transactions. A business that banks want to take advantage of to continue growing, after contracting 18.1% more mortgages last November.
To achieve this, mortgage loan requirements are relaxing. As stated in the latest ‘Bank Loan Survey’ of the Bank of Spain’. A logical behavior due to the greater degree of competition among banks.
This fact joins the increase in the demand for mortgages in the last quarter of 2017. As well as the increase in refinancing and consumer confidence.
Good scenarios to request an appointment to the bank. Whenever we meet minimum requirements to obtain a mortgage loan.
New scenario in the granting of mortgages
In the final stretch of the year (October-December 2017), conditions for the granting of mortgages have relaxed.
In the opinion of the Bank of Spain, the increase in competition between financial institutions and the improvement of the economy have caused the flexibility of the requirements for access to credit. In addition to the increase in the solvency of customers.
The institution warns of this in the periodic survey on banking loans. Recalling that the mortgage requirements have been softened thanks to the fall in the cost of financing and the increase in own funds.
Without forgetting the pressure that supposes a greater competition between entities. Something that has also caused a decline in the number of mortgages rejected.
Demand and refinancing grow
The Bank of Spain also notes the increase in the demand for mortgage loans during the fourth quarter of 2017. Activity linked, fundamentally, to a positive scenario in the residential market.
But also to the recovery of consumer confidence, at interest rates that remain at minimum and to the refinancing of debt.
In the opinion of most entities, these variables will not change during the start of 2018. In fact, it is expected that the criteria for granting mortgages will not change during the first quarter of the year.
Conditions that both families and businesses can take advantage of.
What is necessary to buy a home?
Without doubt, the year 2018 will be excellent for the housing market. With an expansive period that began in 2015 and could continue until 2021.
Unlike other stages, the lack of a sufficient volume of savings may not be an obstacle to the granting of mortgages. Arriving to offer loans for 100% or more of the appraised value of the home. Where is the difference? On the client.
Although it is not a single reason to be discarded, being able to request only 80% of the value of the home can facilitate the operation. Without forgetting that the mortgage expenses carry between 10% and 12% of the price.
Another important detail is the buyer’s financial solvency. Proving that you have enough capacity to pay back money plus interest is essential. Having a stable working life (at least two years in the same job) may be enough.
Without forgetting that, the mortgage can not take more than a third of our income. Specifically, it is recommended not to commit more than 30 to 35% of the fixed salary. Limiting to 700 euros per month the fee for an income of 2,000 euros. Or 850 euros if you earn about 2,500 euros.
Finally, we must also take into account the age of the client. And it is that, the younger the term will be to return the money. Establishing, in general, the 70 years as the maximum age to finish paying a mortgage.
