With a mortgage loan guarantee, you can purchase a home even without a down payment or additional collateral provided by your parents, for example. You can inquire directly at one of Garantia’s partner banks to find out if a mortgage guarantee is available for your mortgage loan.
Garantia’s partner banks and more information about the mortgage guarantee: Asuntolainatakaus.fi
When is Additional Collateral Needed?
How much down payment is needed to buy a home? What is the required down payment if I am not a first-time homebuyer? And how much additional collateral does the bank require for my loan?
Someone planning to buy a home has a lot to learn, as the required down payments are determined by regulatory loan-to-value requirements and also by bank-specific collateral requirements. It’s easy to get confused, and especially buying your first home can feel complicated.
When is Additional Collateral Needed?
The bank usually requires collateral for the entire loan amount, and the collateral value of the home you are about to purchase is typically 70 percent of the purchase price.
In practice, this often means that if your loan need is more than 70 percent of the debt-free purchase price of the home, you will need additional collateral for the excess loan amount.
Common Solutions for Additional Collateral for a Mortgage
The most commonly used options for additional collateral for a mortgage are Garantia’s mortgage guarantee or, for example, the applicant’s parents’ home or other assets.
With Garantia’s mortgage guarantee, the homebuyer can get a loan for up to the full purchase price of the home, provided the home is located in a growth centre and the loan amount is moderate relative to the applicant’s income. Garantia’s guarantee is available from Garantia’s partner banks. When booking a loan consultation, it is advisable to check Garantia’s partner banks on the asuntolainatakaus.fi website.
A customer using their parents’ home as additional collateral can also get a loan for up to the full purchase price of the home. This arrangement is easiest if the parents’ home is not mortgaged, and the loan is taken from the parents’ bank. In other cases, the loan approval process might slow down, and costs can also accumulate if an additional collateral needs to be arranged from the parents’ bank to another bank.
Purchasing Garantia’s Mortgage Guarantee
Buying the guarantee is simple; you just need to book a loan consultation at one of Garantia’s partner banks and express your desire to use Garantia. The bank will assess the suitability of the guarantee for your loan and make you a guarantee offer.
Ville Korte
SVP, Mortgage Guarantees
The author works as a Senior Vice President at Garantia and has over 20 years of work experience in mortgage lending at Garantia and the banking sector.