First House Credit
Emergency Ordinance on the Establishment of the First House Loan entered into force on 4 June a.c. According to it, First House loans will be accessible only to individuals who do not own a home at the time they request it. Prime Minister Emil Boc said about the First House credit:
The credit for the first home will be addressed to all people who have not yet benefited from a mortgage without the need for an age restriction. Through First House credit we want to directly support all those who are in front of buying the first house. I know what difficulties there are: either there is no money needed to pay the advance to the bank, or sometimes there is not enough salary to be able to pay the rates for a house that you borrow from the bank.
The head of the Executive said that through this First House credit, people who want to buy a home for the first time will be able to contract a 60,000-euro loan for the average purchase price of a house under lower credit costs.
Finance Minister Gheorghe Pogea stressed that First House Credit has both a social and economic purpose, as it will lead to the resumption of credit, the unblocking of the real estate market and the impetus for the construction sector.
Minister Gheorghe Pogea explained that for the implementation of this program, the state will guarantee 80% of the value of a First House loan, which by multiplier effect will reach one billion euros, and which will contract for this purpose the National Credit Guarantee Fund for SMEs. This Fund will be expanded to cover the mortgage loans that the banks provide to the population.
Guaranteeing a First House credit has the effect of taking over the default risk from the Government by encouraging banks to make lower interest rates for a First House credit, in order to earn less but more secure than a normal mortgage.
However, analyzes of the current situation on the real estate market show that most of the homes that can be purchased through First House loans are old studios and apartments. As for the currency in which Romanians can contract a First House credit, all calculations show that a euro loan is more advantageous than one in ROL.
People who will face payback rates will benefit from a grace period of three months before being forced to leave the home. After this period, the bank receives the money from the state guarantee. At the same time, the state will be able to sell the home to recover its money. The Fiscal is the institution that will execute the execution for the homes purchased through the First House loans.
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