It will not replace state-subsidized loans for young mortgages. But they can fit

Loans for young people with preferential interest and conditions started to be offered by the State Housing Development Fund on 15 August. Special-purpose loans for young people are intended for housing for families under the age of thirty-six. It pays off mainly where the household is mainly considering reconstruction or modernization. These preferential loans for young people have many limitations for purchasing their own housing.

The fund will provide a loan of up to 1.2 million crowns to buy an apartment, a maximum of 2 million crowns to build or buy a family house. The interest rate is linked to the EU base rate [the lowest 1%] with a five-year fixation option. The interested person attracts especially the low interest rate. It was 1.12% at the time the program was opened. Another advantage is the traditional reduction of the principal by CZK 30,000 for each child born during the loan repayment. Or the possibility of interrupting repayment for up to two years. Which can be the case in a complicated life situation, such as loss of job or long term illness.

Young loans – the first limitation

Young loans - the first limitation

According to the fund’s representatives, people from smaller municipalities, who have a house under construction and need money to complete it, showed the greatest interest in loans. In the second place, the most inquiries concern the loan for modernization, where the maximum amount provided is up to CZK 300,000.

The Fund will only provide the loan for the construction of a family house whose floor area does not exceed 140 m². When buying an apartment, the fund will provide a loan only if its floor area does not exceed 75 m². When buying a house, the loan will only be available again if the floor area of ​​the house is not more than 140 m².

The terms and conditions are also set for the amount of borrowing. The family can borrow at least thirty thousand crowns and a maximum of three hundred thousand crowns for the modernization of housing and at most two million crowns for the acquisition of a family house. But it also has its hooks. In the case of building a family house, the loan must not exceed 80% of the actual cost. Similarly, when buying a house, the loan must not exceed 80% of the house price, including the land price. The same is true for a flat loan [max. CZK 1.2 million].

Furthermore, at the time of applying for a preferential loan for the purchase of a dwelling, the applicant may not be the owner or co-owner of the dwelling or the tenant of the cooperative dwelling, as well as his spouse or registered partner.

Young loans – second limitation

Young loans - second limitation

A combination of a mortgage loan and a loan for young people from sundare gives them some hope. But there is a problem. It is only possible to combine soft loans for young people with a mortgage. The thing is that the bank will proceed to the fact that the Fund will have the first embedded lien in the real estate register and not it. Which banks refuse and reject most.

But even here, a solution is offered. Though gritty. From a pledge point of view, it is possible to combine a loan from sundare with a mortgage, if the client has another property to pledge, in practice a real estate of parents.

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