The surrogate in the time of the Coronavirus: that’s why it’s better to ask for it now


The economic crisis also does good things. The most obvious (perhaps the only one) that the cost of money remains very low and consequently getting into debt with a mortgage remains very convenient. Fixed rates (chosen in over 90% of cases) are normally anchored to Eurirs, a parameter that measures long-term cost of money by simplifying the terms of the speech. The 20-year parameter in these days is around 0.14% and the 30-year parameter is 0.08%. With the addition of the spread applied by the banks to determine the final cost of the loan, between 0.60 and 1% are found on the mortgage card. Let’s say on paper because in reality today obtaining a mortgage is likely to be more difficult than it was before the lockdown. On the other hand, the story of loans to businesses for the restart is teaching it: the conditions can be very convenient but the banks reserve the right to carry out rigorous investigations on the debtor’s solvency.

The three conditions for requesting a subrogation

In this market phase, it must be added that the loan requests for the purchase are still few, the disbursement times are longer because banks and notaries have the backlogs to be disposed of and there is a foreseeable increase in mortgage inquiries that end with the refusal of the application. There are definitely less problems for those who intend to ask for a subrogation, in compliance with three conditions:
1) that the lockdown had no impact on family income;
2) that the ratio between residual debt and the value of the house to which the mortgage would be transferred is reasonably low (below 70%);
3) that the amount to be requested is reasonably high (at least 70-80 thousand euros) to make the operation attractive to the surrogate institution. In these cases, taking into account however that the times for the transition will not be very short, there should be no particular problems in obtaining the approval.

Rates between 0.6 and 0.7%

According to a survey carried out by the online broker it emerges that a substitute of 140 thousand for a house worth 280 thousand euros today costs at the best fixed rates on the market between 0.6 and 0.7%. Taking 0.7% as a value means spending 625.29 euros. If you have a 1% mortgage in progress you save € 18.60 per month; if the 1.5% loan the installment cut rises to 50.24 euros per month, which becomes 82.96 with a current mortgage rate of 2%. However, the usual advice applies: if with the substitute you save a few euros a month, better consider if there are collateral costs, such as the obligation to open a current account more expensive than that of support for the current mortgage.

The mortgage moratorium

Finally, the mortgage moratorium introduced by the Cura Italia decree is having great success. According to an Nomisma estimate, the suspension of the installments was requested by 9% of the borrowers and another 15% would be considering it. Before starting the questions, let’s remember two things. The first is not a free operation. The installments are frozen but must then be paid, with an increase of 50% of the interest accrued in the suspension period (the other half borne by the State). The second is that obtaining a moratorium does not formally affect the possibility of subsequently obtaining the subrogation of the loan, but it will certainly make the operation more difficult, because banks certainly do not look favorably on those who have declared a repayment difficulty in the past.

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