What to know about the $ 1 million loan cut for large families?

As of January 1, 2018, the government once again favored large families. Those who have three or more children will lose one million forints of their mortgage debt per child. The discount applies not only to existing mortgages, but also to future mortgages. With this and similar steps, the government is trying to get young people to start a family.

The HUF 1 million waiver can only be claimed for a mortgage loan reduction on an apartment, house, farm or estate center located in Hungary. For mortgages taken before the decree is published (14.11.2017), the mortgage loan can be used for both home and freelance loans. However, for loans taken after the Decree was published, only mortgages on residential mortgages will be subject to the reduction. The benefit is only available if the loan is still outstanding at the time of application or in the case of a third born child at the time of birth and has not been terminated.

The point of home mortgages is that you need to offer real estate to the bank when borrowing. The property is mortgaged and the financial institution receives a security to repay the loan. You can use home mortgages to finance the purchase of homes and land, home construction, renovation, modernization, or to replace your existing home loan.

You can also use the $ 1 million discount on your home savings loan, but only if your home loan or bridging loan is covered by a mortgage.

The discount can be claimed at the district office by the debtor of the loan.

The discount can be claimed at the district office by the debtor of the loan.

If the debtor has a spouse or partner, the two of them can apply for a $ 1 million reduction, even if only one of the parties is the debtor. There is no cost to the procedure, the bank pays the prepayment fee to the bank instead of the debtor. If the district office rejects the application, you can contact the Budapest Metropolitan Government Office.

Families with several children, where at least two children are in the family and the third or additional child is born after January 1, 2018, will be eligible for support. Blood and adopted children are also considered. The reduction of the debt by HUF 1 million is available from the 12th week of pregnancy. In the case of a fetus, the claim must be confirmed with the district office within 30 days of the birth (or death, or death) of the child.

With the documents, the claimant does not have much to do, as the district office itself obtains the data needed to establish eligibility from the bank, the NAV, the Ministry of the Interior, and checks the ownership from the land registry. The claimant only needs to bring his / her personal document and the claim form. If the parents are divorced, a court order confirming the placement of the child is required, and in the case of fetal support, the expectant care book. You do not need to modify your loan agreement to claim support . After the disbursement of the subsidy, the bank shall recalculate and notify the installment payment within 10 days with unchanged maturity.

Credit institutions calculate the HUF 1 million received from the state as a prepayment, so the amount immediately reduces the capital debt and does not charge a prepayment fee. If the outstanding debt is less than the subsidy, it can also be used for capital contributions, but not for late payment interest. That is, the loan can be repaid at that time and it is offset against the interest due until the repayment. If you claim less than the subsidy when you apply, you will only be entitled to a smaller amount. If the amount paid out is less than the approved amount, the difference is due to the debtor.

Requirements:

Requirements:

  • claimants must be owners of at least 50% of the property that provides the loan
  • they cannot have public debt
  • claimants must have a criminal record
  • arrears may also be eligible for the aid
  • if only one of the spouses / partners is a debtor to the loan, then the other debtor cannot be in the contract
  • children under 18 must live in the same household as the claimant parent (s)

The conditions of application are described in more detail in Government Decree 337/2017. (XI. 14.) Government Decree on the reduction of mortgage debt on housing loans for families with three or more children.

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