What they consist of?
Home loans 100 per 100 represent an alternative form of classic mortgage loans. In truth, the operation is very similar. The differences are determined by the enhanced Loan to Value. In a nutshell, the LTV, which is the ratio between the amount disbursed by the loan and the value of the house, instead of reaching 60 or 80%, rises to 100%.
This means that the entire value of the property is financed and the debtor does not have to add anything from his pocket to finalize the purchase. It is objectively something positive. The pitfalls, however, are numerous.
The issues of guarantees
The issue of guarantees must be considered first. The 100 per 100 mortgage represents for obvious reasons a risk for banks, which therefore ask for additional insurance. Among these is the guarantee.
The debtor is called to take it out, in order to cover at least 20% of the amount, ie the part of the financing determined by the increase of the LTV from 80 to 100. Secondly, some banks, especially the more prudent ones, require a lien on the government bonds, always for the same amount.
The concentration of banks remains high as regards the profile of the debtor. Her income must be sufficient and stable, therefore permanent public employees are privileged. Exceptions are those who are “covered” by state initiatives, such as guarantee funds dedicated, among others, to young couples.
An interesting offer
Among the cons of home loans 100 per 100 the cost in absolute terms also stands out. It is true, in fact, that 100% of the expenditure for the purchase of a property is financed. It is also true that banks are rarely satisfied with the guarantee and compensate for the risk with an increase in interest rates.
For this reason, 100 per 100 mortgages are generally much more expensive than classic mortgage loans. This is a logical consequence, which the customer cannot remedy. Also because it intercepts a trend practically shared by all banks.
In this scenario, Unicredit’s offer stands out: which joins the Guarantee Fund for first home mortgages. The conditions are favorable, also because as guarantor there is, at least for a portion of funding, the State itself.
Specifically, 100% coverage is allowed for mortgages up to $ 250,000. It is reserved for those who are not yet 40 years old and offers both the fixed rate and variable rate formula . The conditions are advantageous: it is possible to reduce the installment or skip (in the first case it acts on the repayment period).
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