Who can (and who shouldn’t) take out a mortgage after the state of alarm

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Spain finally exits the alarm state, but the crisis of the coronavirus will leave the economy of many homes. It is time, therefore, to apply one of the lessons learned in the past recession: you have to be very responsible when asking for financing, especially if it is to buy a home.

In this sense, from the bank comparator HelpMyCash.com they have prepared a manual so that any potential applicant knows if they meet the requirements to obtain a mortgage or if it is better for them to wait for their situation to improve.


Mortgages

Who meets the requirements?




According to HelpMyCash.com, the key for the Bank
approve the request of a client is job and financial stability. Therefore, people who have kept their job during confinement, who have not suffered an ERTE and who hold a position of some responsibility in a company in a sector less affected by the pandemic are more likely to get a mortgage.

Poster of a mortgage offer (Dani Duch)

In order to make a responsible decision, these applicants also have to assess whether their company could maintain good financial health in the short and long term. If they consider that they do, they must also meet the basic requirements to be able to obtain approval: collect sufficient income to pay the installments, have little or no outstanding debt and have sufficient savings to pay the part that the bank does not finance plus purchase and sale expenses.

In the case of the self-employed, however, things get complicated, since their situation is, by nature, more unstable than that of employees. Self-employed workers who could ask for a mortgage with some certainty would be those who have been able to resume their economic activity without too many potholes, provided that it is in a sector that is little affected by the health crisis and that there are good prospects for the future.




The other side of the coin

Who better not ask for a mortgage?

On the other side of the coin, on the other hand, are those people whose finances have been most affected by the state of alarm: those who have become unemployed, those who have suffered an ERTE, those who work in a company that has fired various employees during confinement or that operates in a vulnerable sector such as tourism or hospitality … In these cases, it would be advisable to wait for its economy to improve and stabilize.

From the comparator they remember, at this point, that having retained employment is not a guarantee of stability. In order to know if the mortgage could be paid, other aspects must also be taken into account, such as the sector in which you work, the type of position you occupy, the company’s own financial situation … It is essential to consider all these aspects to to be able to borrow responsibly.

Offer of a mortgage in a bank

Offer of a mortgage in a bank (Dani Duch)





Alternatives

What are the best mortgages for June?

Those who do enjoy a good economic situation can get good financing conditions, since the mortgage loans offered by Spanish banks are still cheap compared to those that were granted before the crisis. At a variable rate, for example, HelpMyCash.com highlights products such as the Open Variable Openbank Mortgage (from Euribor plus 0.99%) or the Freedom Mortgage of Banco Mediolanum (from Euribor plus 1.05%), while at Fixed are made by credits such as the Santander Fixed Mortgage (from 1.79% to 30 years).

The ideal, in any case, is to go to various financial institutions to compare their mortgage offers. When reviewing the conditions, yes, it is important not to focus solely on the interest, since you also have to pay attention to other aspects such as the products necessary to get the maximum bonus, the commissions, the repayment period, the maximum financing offered .. .



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