Buying a house is one of those key moments in life that we all look forward to with excitement and, sometimes, a little nervousness. But before we get carried away by the dream of waking up every morning in our own home, we need to put our feet on the ground and plan well. It is no secret that to make this dream come true, it is necessary to have a good savings cushion (or to know about financing solutions such as an ICO guarantee).
Understanding home buying in Spain
Let’s get down to business. Imagine you have found that perfect apartment in Valencia, overlooking the Turia or perhaps in Ruzafa, the trendy neighborhood. We are talking about an apartment around 200,000 €. To get the keys, you first need to have 30% of the total: 20% for the down payment and an additional 10% to cover all those extra expenses that always arise, such as taxes and paperwork. In numbers, we are talking about €40,000 for the down payment and about €20,000 for the expenses. Yes, the road to buying a home in Spain starts with having more or less a good €60,000 saved up.
But what if you don’t have all that money under your mattress yet? This is where the ICO guarantee comes in, a helping hand from the government to facilitate this big step.
What is the ICO guarantee?
Let’s talk about that financial lifeline known as the ICO guarantee. No, it is not a gift from the government, much less a direct loan that you can spend to celebrate the purchase of your apartment. The ICO guarantee is rather a “little push” so that the bank will look at you with better eyes when giving you the mortgage loan. In short, the government guarantees up to 20% of the down payment of your house, which means that you only need to worry about the remaining 10% for expenses. Keep in mind, however, that this does not reduce the price of the apartment; it simply makes it easier for you to get the loan to buy it. So, instead of running after that €60,000, you could start your path to ownership with around €20,000.
Be careful, here, as in almost everything, there is also fine print. Having an ICO guarantee means that you will have two loans: one for the guarantee and another for the mortgage. Do the numbers or ask us if you have any doubts.
Requirements and conditions to access the ICO guarantee
Now that you know what the ICO Guarantee is, you’re probably wondering, “Am I eligible? Well, there are a few boxes you need to check before you get your hopes up. First, if you’re under 35 or have little ones running around the house, you’re on the right track. Also, your income should not exceed €37,800 per year; if you plan to buy with your partner, then double that figure. It is also crucial that it is your first home and, of course, that you plan to put down roots in Spain.
But wait! Before you rush to your nearest bank in Valencia, you should know that not all banks work with ICO guarantees. Only selected entities collaborate in this program, so be sure to check the official list to avoid surprises. Once you find a collaborating bank and if you meet all the requirements, you can start the process so that your dream of owning a home in Valencia begins to take shape.
Important considerations before applying for an ICO guarantee
Before jumping into the ICO guarantee pool, it is vital that you know all the details. First, remember that this guarantee is not money you are given as a gift; it is a loan, and as such, you have to pay it back. This means that in the end you will have two loans: the mortgage and the guarantee. And yes, this means that your monthly payment will be higher than if you had paid the down payment out of your own pocket.
Also, even if the government puts its signature next to yours, don’t think that this frees you from responsibility. If at some point you find yourself in a bind and cannot pay, the weight of the debt will fall on your shoulders, not on those of the government. Finally, keep in mind that by having the ICO guarantee, the banks can put you under the microscope more closely, possibly being more demanding with their conditions. So, before making any decisions, make sure you are clear on all these points and consider whether you are prepared to handle this level of financial commitment.
How complete renovations add value to your new home
Now, let’s imagine that you have already got your new home in Valencia with or without the help of the ICO guarantee. It’s the perfect time to think about how to turn that house into a real home. This is where integral reforms come into play. Making improvements to your property not only allows you to customize every corner to your liking, but can also significantly increase the value of your home.
Whether it’s updating the kitchen, transforming the bathroom or simply giving the spaces a new look with a coat of paint, renovations can turn your house into the home of your dreams. Plus, if you decide to sell in the future, these improvements can be a big plus in attracting potential buyers. In Valencia, known for its unique blend of history and modernity, a renovated home can especially stand out in the market. And best of all, having professionals in integral reforms can make this process much simpler and more satisfying, guaranteeing quality results that you will enjoy for years to come.
At Kaleidoscope, every project is a new work of art. With our team of experts in integral reforms, we assure you a tailor-made advice and a final result that will exceed your expectations. To learn more about our services or to get a free quote, we’re here to help. Discover how easy it is to get started with our no-obligation quote tool. Click below and transform your space with us:
