A home purchase guarantee is a government guarantee that covers interest payments for first-time home-buyers. The purpose is to give support to households who want to buy a home but who have difficulty obtaining a mortgage (home loan) even though they have a long-term ability to pay. This may be due to individual risk factors such as not being previously known to the bank or individual payment defaults etc.
The home purchase guarantee can be seen as insurance for the lender, which insures itself against the risk of losing interest income on a mortgage by taking a guarantee with BKN.
It is always the lender that makes the assessment and judges whether a home purchase guarantee can be a complement that will enhance the possibility of granting a mortgage.
The following conditions must be fulfilled before a home purchase guarantee can be taken out:
- The borrower must not own or have owned a detached house, row house, cooperative apartment or similar home.
- The borrower must be assessed as having the ability to meet the interest and amortisation payments.
- The home must be intended for permanent residence.
The home purchase guarantee guarantees interest payments in relation to the lender up to an amount of SEK 100 000 over a maximum period of 10 years. The guarantee does not cover amortisation payments and other costs for the loan.
The home purchase guarantee does not mean that borrowers can choose not to pay their loan costs. This is why it is important that borrowers who have a problem meeting their payments contact their lender as soon as the problem arises. If the borrower is unable to pay, the lender can request that BKN honors the guarantee and reimburses it for the non-payment of interest. When BKN has honored the guarantee, the borrower has a debt to BKN.
The home purchase guarantee is taken by the lender in connection with the purchase of the home and the payment of the mortgage. Please contact your bank for more information about the possibilities of obtaining a mortgage with the help of a home purchase guarantee.