You have received an extra payment and you have thought that it would be best used to pay off your home mortgage. But you own a protected home and you are not sure if the law allows you to make early repayments without losing the aid you have received as a beneficiary. Find out all about the repayment of a VPO mortgage.
Amortization of VPO mortgage: the regulations
The regulations governing public housing are quite complicated. And it cannot be said that they are very precise in cases of early or full repayment of the loan. In addition to the requirements of state law, there are also specific regulations of each autonomous community, so it is not unusual for confusion to arise.
In fact, early repayment is one of the issues that causes the most confusion among owners of public housing. Sometimes, it even generates conflict with the bank that has granted the agreed loan.
As a starting point, you need to be clear about the Housing Plan by which your house is recognized as protected.
For these properties, the regulations allow partial or total repayments of the agreed loan as long as it is agreed with the financial institution. However, if you were a beneficiary of the Direct State Aid for the Entry, you will not be able to repay more than 40% of the agreed loan during the first five years of the mortgage. That is: if you advance amounts and reduce the mortgage by less than 60%, you will have to return the Aid for the Entry and the rest of the state subsidies received with the corresponding late payment interest.
These are the requirements of state law, but you should not forget that the regulations governing protected housing vary from one community to another. If you have any doubts, it is best to review the mortgage deed and go to the Housing Department of your community where they can clarify any issue that may be confusing to you.