We continue our series of baby loan articles in which we answer the most common questions based on the requests we receive. Following a pattern of specific questions received, we put together a “model couple” through whom we present the terms and conditions for baby loans and other government grants.
We will look at the situation with baby support, whether it is worth replacing your existing home loan, and whether and in what form to apply.
Can they borrow a baby loan?
According to the decree, Good Finance qualifies for a baby loan because:
- Erika is under 41,
- Gábor has a 3 year continuous TB relationship,
- they have no public debt and are not on the negative KHR list.
However, the regulation also states that creditworthiness is to be decided by banks according to their own rules . The creditworthiness of Good Finance is influenced by two factors:
- Do you have a minimum income required by the bank?
- Can they fit into their monthly income to cancel two loans at once?
We assume that 35% of their income is chargeable under the regulations effective July 2019 because the interest period for a baby loan is 5 years. 35% of their income is HUF 75,250. This way, the maximum repayment limit of $ 50,000 of the 10 million baby loan is just enough to cover the maximum amount of debt allowed, so they can take the full amount.
Is It Possible To Prepay A Home Loan From Baby Waiting Support?
The baby loan is non-interest bearing for 5 years from the date of enrollment and only the annual guarantee fee of 0.5% is payable on the principal. So better than any current market-based home loan. So you might want to replace your home loan with your baby waiting room to get rid of the interest burden – at least for most of your home loan.
Why? Remember, with the arrival of your second child, the state will release $ 1 million from your existing home loan. It would be a pity to lose – and if the entire loan is repaid, the state will not have to spend $ 1 million.
How do I prepay my home loan from the baby room?
Because baby loans are free to use, people spend whatever they want. You can even prepay an existing loan. In this case, the fees specified in the loan agreement are to be taken into account, which may not be more than 1% of the outstanding debt, in some cases less. It can be prepaid free of charge at 200 000 HUF per year.
Under the regulation, babysitting support is clearly also available for loan redemption. The terms and conditions of the loan redemption will be decided by the lenders previously borrowed according to their own regulations.