The UVA mortgage loans have once again taken center stage and are among the options considered by those aiming to buy a home of their own. But before taking out a long-term loan, it is important to analyze the personal and family financial situation, the available income, the preceding savings, and the terms offered by each lender.
In this context, Elisabet Piacentini, tax expert, explains in an interview with Para Ti what to consider before applying for a mortgage, how much income may be required to access a loan of 100 million, and what documentation employees, self-employed workers, and freelancers must present.
“We must have upfront savings”
-Is it advisable to pursue the new mortgage loans? What should be analyzed before taking out a loan?
-Before deciding, we need to review our financial situation. There are three steps we should consider.
First, review our financial conduct and check the Central Deudores Registry of the Central Bank using our CUIT or CUIL, to know what information appears on file about us.
Next, we can visit the websites of Banco Nación or other banks and run simulations. It is important to compare terms, installments, and the conditions of the different options before deciding.
And we must also have an upfront savings. Loans do not finance 100% of a property’s value, but roughly between 75% and 80%, depending on the line and the bank. Therefore, you should have the money necessary to complete the purchase and cover the transaction costs.
“The installment cannot exceed 25% of income”
-For a mortgage loan of 100 million, how much income per month is required?
-For a loan of $100 million, the household can combine the income of a co-signer, the partner, or another family member, depending on each bank’s conditions.
As a reference, we can talk about around $3.5 million in monthly household income. But this depends on the loan term, whether it is 15, 20, or 30 years, and the requirements set by each institution.
There is also the consideration that banks typically set a relationship between the installment and the income. For example, if the guideline is that the installment cannot exceed 25% of the income and the household earns $3.5 million, the monthly payment would be about $875,000.
It is important to note that this percentage can vary depending on the bank and the individual circumstances of each applicant.
“We must consider costs and the documentation required to finalize the transaction”
-How do UVA loan installments work and what should you keep in mind?
-UVA loans are indexed to CER, which is linked to inflation. Therefore, before taking out a loan you must assess how your income and your ability to repay might evolve over time.
The idea is that salaries or turnover can also keep pace with inflation, but this is not guaranteed and is something that each person must evaluate.
When you buy a home, a portion of the monthly income goes toward building your own equity instead of paying rent. But you must analyze each case and not look only at the initial installment amount, but also how it could evolve in the future.
It is also important to know that there are differences between new and used properties, and in addition to the property’s value, you must consider the costs and the documentation necessary to complete the transaction.
“Banks tend to prioritize employees in a dependent relationship”
-What documentation must employees, self-employed workers (monotribistas) and freelancers present?
-For employees in a dependent relationship, salary slips are generally requested, and a certain length of service must be demonstrated. Banks typically perform a simpler verification of these incomes.
Self-employed workers (monotribistas) must demonstrate their activity and their income, and generally about two years of activity in the category is required.
In the case of freelancers (autónomos), documentation related to invoicing, VAT and tax payments, and a certification from the accountant that allows proving monthly income may be requested.
Banks typically prioritize employees in permanent employment because income verification is faster, while for monotribistas and freelancers more documentation may be required.
Elisabet Piacentini, Tax Specialist, Coordinator of the SME Commission of the Professional Council of Economic Sciences (CPCECABA) @elisabet.piacentini
