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Youth Housing Credit

What is youth housing credit?

Simply put, it is financing support from the bank that helps young people between 18 and 35 years old to purchase a property.

Nowadays it is increasingly difficult for young people to acquire their own home. House prices have been high, and salaries often don't keep up, making it challenging for younger people to take a step towards independence.

Youth housing credit then helps young adults to overcome this situation. But how does it work?

To apply for a youth home loan there are some requirements you must meet, including:

Initial down payment: the higher the amount you are willing to pay for the down payment on the house, the greater the probability of having the housing loan approved. You must have enough to pay 10% of the total for the house and, if you are able to pay more, we encourage you to do so to increase your security;

  • Effort rate: must have a low effort rate. What does this mean? It means that the housing loan must not exceed more than 40% of your income;

  • Safe work: it is important that you are in a stable professional situation. This way, the bank will have more confidence in you so that it can carry out the loan;

  • Financially stable: as the previous point already indicates, your salary and financial conditions will also have an impact on how you are seen by the bank and on the bank's decision to help you or not;

  • Guarantor: some banks may ask you to choose a guarantor as a form of guarantee that the debt will be paid in case of default.

When you apply for a home loan, you must select a rate. The rate can be fixed or variable. Let's explain the differences between the two:

  • Fixed rate: in this case there is a continuous interest rate and the installment is the same until the contract comes to an end. The increase or decrease in the interest rate does not affect anyone who decides to opt for this type of rate. The fixed rate period can range from one year to thirty years, depending on the bank and its conditions.

  • Variable rate: in this case, interest is reviewed every three months, six months or one year, depending on the European reference index chosen. In this rate option, when interest rates are lower, the person benefits from this drop. When interest rates rise, the mortgage payment also shows this increase. The variable rate is currently the most affordable and the one that saves the most money.

To apply for a youth home loan, there are some necessary documents that you must have with you, including:

  • Identification document;

  • Taxpayer card (or citizen card);

  • Your three most recent payslips;

  • Declaration proving the entity you work for;

  • Bank statement from the last few months (confirm with the bank how many months it is);

  • IRS declaration.

With these documents, your bank will then be able to analyze your situation to understand whether there are conditions for the housing loan to be approved or not.

Read the full article here!

Source: Imovirtual


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