These are the requirements to benefit from the relief measures for mortgages
The Official State Gazette (BOE) publishes this Thursday the Code of Good Practices for mortgage debtors at risk of vulnerability, which details the requirements for middle classes can benefit from mortgage relief measures approved on Tuesday by the Council of Ministers.
The Code of Good Practices for middle-class debtors at risk of vulnerability, whose creation is contemplated in Royal Decree-Law 19/2022, of November 22, aims to articulate a temporary path for credit institutions and lenders to continue supporting families, with objective of facilitating the payments of those mortgage loans which, being viable, have experienced a sharp increase in mortgage payments in relation to family income, at the same time that all expenses related to energy supplies or the shopping basket, among others, have also risen in a general way.
Thus, the planned measures seek ease the financial burden households and ensure the continuity of debt payments of this nature, softening the impact of the current shock and strengthening the payment capacity of households throughout the life of the loan, all without affecting financial stability. In summary, the new Code of Good Practices will allow a series of households at risk of vulnerability to maintain their mortgage payments for twelve months and extend the maturity period up to seven years.
Mortgages who meet the requirements established by the Code may choose to extend the term total of your loan up to a maximum of seven years, with the option of setting the installment in its amount as of June 1, 2022 or in the amount of the first installment for those loans in which it is charged after said date, for a period of 12 months from the moment the novation is made through a total or partial lack of principal.
The unpaid principal will accrue interest at an interest rate that represents a 0.5% reduction in the value of the loan. In any case, the extension of the term cannot imply a reduction in the amount of the quota below that which was being paid as of June 1, 2022.
Another option that debtors can opt for is the conversion of the formula for calculating interest on the initial loan, going from a formula subject to a periodically revisable variable rate to a fixed rate. The offer made by the entity, in this case, may have the fixed rate freely offered by the entity, which must be “clear, transparent and comparable” and allow the client to know the consequences and scope of the novation that is offered. Individuals who are holders of mortgage loans on their habitual residence may avail themselves of these measures, whose acquisition price does not exceed 300,000 eurosconstituted until December 31, 2022. The term to formulate the requests will be extended for two years.
Requirements to benefit from the measures
For a debtor to be considered to be at risk of vulnerability, they must meet certain requirements, such as that the total income of the members of the family unit does not exceed the limit of 3.5 times the Public Indicator of Multiple Effects Income (IPREM) annual payment of fourteen payments (29,400 euros per year). A family unit shall be understood to be the one made up of the debtor, his spouse not legally separated or registered common-law partner, and the children, regardless of their age, who reside in the dwelling.
The limit will be 4.5 times the IPREM if one of the members of the family unit has a declared disability greater than 33%, a situation of dependency or an illness that permanently disables them to carry out a work activity, or 5.5 times the IPREM if the mortgagee is a person with cerebral palsy, with mental illness, with an intellectual disability equal to or greater than 33%, with a physical or sensory disability equal to or greater than 65%, or with a serious illness that proves to be incapacitating him or his caregiver to carry out a work activity.
Another requirement is that, in the four years prior to the time of the application, the family unit has seen its effort to access housing (mortgage burden on family income) increase by at least 1.2 times or have occurred in said period. particularly vulnerable family circumstances. The third requirement for families to join is that the mortgage payment is greater than 30% of the income net income received by all the members of the family unit.
Two years to request the extension of the term
Regarding the possibility of extending the mortgage loan by up to seven years, the novation request may be made from the moment the list of member entities is published and until December 31, 2024. Financial entities have a month to adhere to the new Code of Good Practices. The enrollment is voluntarybut the commitments that are acquired are mandatory for the member entities.
Once the request for the mortgage novation is made and after checking the financial institution all the documents sent by the applicant and the fulfillment of the requirements, the term for the formalization of the novation will be 15 days. Likewise, adhered subjects must adequately inform their clients about their adherence or not to the Code of Good Practices and the possibility of availing themselves of its provisions, information that they will have to provide both individually and through their commercial network. offices and on its website.
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