Unlike the more traditional form of financing for the purchase of a property, the 100% mortgage allows the beneficiary to cover the full amount without having to have extra funds. Without considering the problems associated with the greater risks that such a practice may imply, it is the most appropriate solution for those who want to buy a house but, for example, do not have liquidity to cover the costs of the advance requested by the banks, which is usually around 20% of the total value. Having established this, it is evident that the greater risk of bank insolvency is somehow offset by the request for greater guarantees.
implying
A 100% mortgage is defined as one that generally covers more than 80% of the value of the property and that in some cases can reach the maximum percentage. It is a mortgage loan, and to understand it better, it is good to indicate the differences with the type of land.
The rules of the “owner” credit are established in the Resolution of April 22, 1995 of the Interministerial Credit and Savings Committee: in this case the maximum value of the coverage granted is equal to 80% of the value of the property. the “mortgage loan it does not have the limits of land ownership, so it can exceed the threshold mentioned above: it is the right solution for those who need to finance a mortgage with an LTV greater than 80%, but not all lenders accept the risk. That is why the banks that opt for this route require greater guarantees from borrowers than those usually granted by this form of financing.
additional guarantees
Guarantees that may include, for example, a bond insurance policy. This comes to cover the expenses related to the excess with respect to what was disbursed by the bank up to a maximum of 20%. The borrower can choose to do it in his name, and therefore pay it personally, or to the same bank that grants the loan, which will be able to recover the amount by imposing a higher margin.
I also’mortgage on the house being financed becomes a form of guarantee for the bank in the event of its client’s insolvency: a mortgage that can also fall on a property other than the one being sold (or on other assets), as long as the value covers the costs of the initial investment made by the credit institution. The presence of a third element that acts as guarantor in the event of bankruptcy, being able to take charge of the refund of the entire amount, also falls within the forms of protection.
Consap. Fund
To cover these guarantees, for mortgages that exceed 80% of the LTV, the banks that have adhered to the First Housing Guarantee Fund managed by Consap can now grant credits up to 100%. With the Sostegni bis decree, the Draghi government refinanced this Fund, increasing the maximum limit of the grantable guarantee, raised from 50% to 80% of the principal, and granting protections for the disbursement of 100% of the mortgages (renamed precisely as “conscious mortgages”). The necessary parameters to access it are under 36 years of age and an ISEE of no more than 40 thousand euros: now there is only time left until December 31, 2022. Among the banks that have joined this Fund are Mps, Intesa Sanpaolo and Credit Agricole.
Another way that can be taken to cross this threshold is i 95% financing of the value of the home: however, the excess of 5% must be paid in advance, an element offset by the application of interest rates that are generally more convenient than a 100% mortgage. In these circumstances (for example Banca Ing or Bnl) a guarantor can be proposed in the event of insolvency, which is not contemplated for Consap mortgages (the guarantee is in fact exclusive to the Fund).