The mortgage is a banking product that allows the client to receive a money in exchange for commitment to return said amount, along with the corresponding interest, through periodic payments. The mortgage firm, due to the constant rise in interest rates, continues in an unstoppable decline.
The difference with other loans is that, according to BBVA, it has a warranty additional: the property acquired. One of the first questions that banks ask clients who come to apply for a mortgage, in order to buy a home, is their date of birth. Because yes, in this case, age matters.
What is the maximum age to apply for a mortgage?
In Spain there is no law that establishes the maximum age to apply for a mortgage, but it is each bank that sets this limit according to its policy. When requesting a mortgage loan, age is essential since it directly influences the debt capacity, the repayment period, the financial solvency of the holder and the risk of non-payment.
Although it is not mandatory, the Bank of Spain recommends that the mortgage repayment period does not exceed 30 years and that the last installment be paid before that the owner turns 75. That is, it advises, as a general rule, not to request a mortgage for three decades after reaching 45 years of age.
Applications, indicates ‘The Huffington Post’, tend to reduce from the age of 56. And, in a 30-year mortgage, a person of that age would take the loan to 86 years of age. The only financial institution that offers the possibility of finishing paying the mortgage as an octogenarian, the aforementioned media highlights, is Banco Santander.
Factors that the bank analyzes for a mortgage loan
The economic solvency of the buyer is one of the main aspects to take into account when taking out a mortgage. At this point the debt capacity comes into play. Experts recommend not allocating more than 30% of your monthly income to paying your mortgage. Another aspect to take into account is the employment stability. A person usually has greater stability between 35 and 45.
Banks offer financing, at most, for up to 80% of the total appraisal value of the property. Therefore, the future owner must have saved the remaining 20% along with the expenses associated with the purchase (notary, appraisal, taxes, etc.), which represent between 10% and 15%.
It is common that, as a person gets older, their savings level increases, which will allow you to reduce the amount of the mortgage you need to take out to acquire the home you want to buy.
The maximum recommended period to complete the repayment of a mortgage is 30 years. Therefore, as you age, the number of years to satisfy a mortgage loan decreases. This means that, even if mortgage financing is granted to a person, for example, 50 years old, the amortization period It will be a maximum of 25 years.
This means that the monthly payments are higher than in the case of another younger buyer, which can extend the repayment period up to recommended maximum of 30 years. However, as it is usual that the older you are, you have more savings, it will be possible to meet higher payments.
Therefore, younger buyers, although they tend to have a less stable employment situation and have less savings, have the possibility of taking out a mortgage with a longer repayment period and having lower monthly payments.
In any case, to understand all the key factors when taking out a mortgage, it is essential to have the expert advice such as that of the banking entity, which guides the future owner throughout this process and resolves any questions that may arise.
2023-10-22 00:27:25
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