Do you live in the Balearic Islands? Then you will know that buying a home in Mallorca, Menorca, Ibiza or Formentera is very expensive. To give you an idea, from HelpMyCash we have calculated how much an 80 square meter apartment can cost in your area and the average price, without taxes, exceeds 250,000 euros, which makes it the highest in Spain.

Since homes cost so much, you need to have a lot of savings to complete the purchase: the 20% that banks don’t usually finance plus an extra 12% for taxes and other formalization expenses. That prevents many residents in the Islands from becoming owners of a flat or a house, especially young people who have not been able to save so much money.

Fortunately, the Government of the Balearic Islands has decided to take action on the matter to facilitate access to housing. From now on, several banks will grant publicly guaranteed mortgages of more than 80% so that people with modest savings can also buy a flat or a house in the region. In this article we explain who can benefit from this measure and how to process your application.

Mortgage requirements of up to 100% guaranteed by the Government of the Balearic Islands

This aid, which is granted through the IBAVI Mortgage Guarantee program, is a new measure promoted by the Balearic Institute of Housing, an organization that depends on the Government of the Balearic Islands. What this institution intends, basically, is to facilitate the purchase of a habitual residence to the residents of this archipelago.

Now, you should know that not everyone can access a public endorsement. To be granted it you must necessarily meet the following requirements:

Personal situation:

• You must have Spanish or European Union nationality or have legal residence in Spain.
• You must have been residing in the Balearic Islands for at least five years, either continuously or discontinuously.
• You must be the person who buys the home and asks for the mortgage.
• Your gross annual income cannot exceed 57,117.67 euros (64,257.38 euros together if you buy the house together with other people).
• You cannot own or usufructuate another home in Spain, with the exceptions you will find on the IBAVI website.

Conditions of the home you want to buy

• The home you are going to buy must be located in the Balearic Islands.
• The house or flat you buy will have to be your habitual and permanent residence.
• The price of the house, including its annexed elements (garage, storage room, etc.), can not exceed 270,151.20 euros, without taking into account taxes and other expenses associated with the formalization of the sale.

Requirements of the mortgage loan you hire

• The amount of the mortgage granted by the bank must be equivalent to a minimum of 80% of the value of the home.
• You will have to sign a counter-guarantee policy that allows IBAVI to claim the unpaid installments if you stop paying the installments and the bank executes the public guarantee to recover the borrowed money.

The public guarantee provided by the Balearic Islands will cover up to 20% of the amount of your mortgage, so the bank can lend you a maximum of 100% of what the home you are going to buy costs you. That guarantee will be active until you return the guaranteed amount to the bank. To be granted, you will have to pay a commission of 0.5% on the amount guaranteed by IBAVI.

Steps to hire one of these mortgages of more than 80%

Do you meet all these requirements? Perfect! If you want, you can now process your application to be granted a mortgage of more than 80% guaranteed by the Government of the Balearic Islands. Here are the steps you have to follow:

1. Go to the banks that are adhered to this program: for now they are CaixaBank, Colonya (Caixa Pollença) and Cajamar.
2. Express your intention to request the public endorsement and deliver the documentation that the entity asks for. The bank itself will be responsible for sending your application to IBAVI.
3. It awaits the resolution of the Balearic Institute of Housing. If it is unfavourable, you may file an appeal within 15 days of notification.
4. If the resolution is favorable, assess the conditions of the mortgage offered to you. If they seem good to you, you will have to set a date for the signing.
5. Formalize the sale and the contracting of the mortgage in a notary (you can choose it).

You can benefit from this program until December 31, 2024 or until its budget, which is 15 million euros, is exhausted.

What other Autonomous Communities guarantee mortgages for people with little savings?

If you want to buy a home in another autonomous community, you should know that some regions also have programs similar to the one that has been launched in the Balearic Islands. They are:

• The Community of Madrid guarantees mortgages to young people up to 35 years old so that they can finance up to 95% of the purchase of their first home, whose price cannot exceed 390,000 euros. This aid is granted through Banco Santander, imagin (CaixaBank) and Ibercaja.
• The Region of Murcia offers a public guarantee of up to 20% so that young people under 35 can finance the entire purchase of their first home, provided that the price does not exceed 175,000 euros. The banks adhering to this program are Cajamar, Bankinter, Caja Rural Central and Caja Rural Regional.
• La Rioja has an agreement signed with Ibercaja, Laboral Kutxa, ABANCA and Caja Rural de Aragón for these banks to grant mortgages of up to 100% to those interested in buying a home in the region.

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