If you are under 35, take advantage of the advantageous financing offered by banks
If you have finally found the house of your dreams that fits your budget, you are under 35 years old and need financing, you can make the most of the 'youth mortgages' that many financial institutions have designed for clients with your profile.
These products are aimed at an audience between the ages of 18 and 35 and, compared to traditional mortgages, they have a series of advantages that you should take into account.
Advantages of a youth mortgage
- Higher financing: Banks understand that, due to age and work experience, the holders of these mortgages have a limited savings 'cushion'. Hence, there is the possibility of financing more than 80% of the value of the home. Certain entities even commit to offering you 100% of the amount you need. However, in this case you may be asked to present collateral that offers security to the bank in the event of insolvency. The final amount to be financed, however, will depend on the particular conditions of each applicant.
- Longer repayment periods: Since the applicant has a longer life ahead of him to pay off the debt, the bank is more flexible when it comes to agreeing on the repayment period. The longer the agreed term, the lower the monthly cost of your mortgage will be. However, the interest may also be higher. In general, banks and institutions usually limit the maximum term of mortgage loans to 25 or 30 years, although in some cases a longer term may be offered.
- Grace period: Some entities contemplate a grace period for the initial payment of the installment for their youth mortgages. This option can be ideal for recovering the initial outlay for the purchase of the home or being able to undertake other expenses associated with the home.
- Fewer fees: This is another of the great advantages of mortgage products aimed at those under 35. Each bank has specific conditions, but it is possible to obtain a mortgage without fees (opening, amortization, etc.)
- Lower interest rates: Some financial institutions offer a tighter spread on their 'youth mortgage' than on the rest of their mortgage products.
- No obligation to take out mortgage-related products: Unlike other types of clients, some financial institutions do not link the formalization of this type of product to the contracting of a pension plan or life insurance.
As you can see, taking out a youth mortgage has many advantages. But you should not forget that there are a number of factors that will make negotiating with the bank much easier:
- Your employment situation: The bank will value positively if you are an employee and have been working at the same centre for some time. And, of course, the monthly income that comes into the household is important in considering the operation.
- The savings you can contribute to the purchase of the home. If you have the possibility of self-financing around 30% of the total cost of the house, you will have many points in your favor when negotiating with your bank.