Are you thinking about buying an apartment to become independent or start a family? Without a doubt, this is one of the most exciting and beautiful experiences there is. But did you know you can use your AFP (Spanish Pension Fund) to buy an apartment ? Yes, Can you use this is one of the different ways to finance your purchase. Below, we’ll tell you everything you need to know.
On May 1st of this year, the law authorizing the withdrawal of up to 25% from AFPs was published. This is Law No. 31017, which establishes measures to alleviate family finances and boost the national economy in 2020.
The regulation specifies that its purpose is to counteract the negative economic effects generated by the COVID-19 emergency. Under this premise, it authorizes AFP members to withdraw, on an extraordinary and voluntary basis, up to 25% of the total funds accumulated in their individual accounts.
In this article, we’ll tell you how to take advantage of this percentage when purchasing a new apartment . But first, let’s review some basics:
What is the AFP? Can you use
AFPs are private financial institutions whose purpose is to manage pension funds through personal accounts. They provide retirement, disability, and survivor’s pensions, and cover funeral expenses.
However, croatia phone number library joining an AFP doesn’t just mean saving for retirement; it also means being able to purchase an apartment with a mortgage.
You may be interested in: We teach you how to access a mortgage loan
What are the requirements for using 25% of your AFP? Can you use
There are certain documents that you must present to access 25% of your AFP :
- Report issued by SUNARP related to the properties that are under your ownership (either as an individual, part of a marital partnership, or as co-owner of a share greater than 50%).
- Document showing your CIC amount (last account statement or available information)
What steps should you follow to remove it?
Members can use 25% of their AFP funds to purchase an apartment or house and pay part of the down payment on a mortgage loan in the financial system or repay the previous debt on a first-time home. Below, In-house agency vs. external partner: key differences we show you the steps to purchase a home with AFP funds :
- Request your latest AFP account statement . This information is available both on your AFP’s online platform and at its offices. It’s easy to download.
- You must apply for a mortgage loan from a financial institution, attaching the above document and stating that you will use the 25% of your AFP fund under the law. They will evaluate your application and requirements. Please note that the approval letter for this benefit is different from the regular approval letter.
- With the pre-conformity document (valid for 60 calendar days), you must request the AFP to withdraw a percentage of your pension fund.
- With the approval of the mortgage loan , the AFP will make the disbursement directly to the financial institution within a period of no more than 10 days and the latter will be responsible for delivering it to the real estate agency at the time of disbursement.
What are the advantages of withdrawing your AFP fund to buy a home?
- No matter your age or the size of your fund: you don’t have to wait until you’re 65 or have a specific accumulated fund.
- It benefits you and your partner: both spouses can combine their retired contributions if neither has a property in their name.
- It’s easy and simple: enjoying the benefits only requires a few steps, usa b2b list which are detailed in the previous section.
- This way, members will be able to cover the down payment on their first apartment purchase through a mortgage loan from the financial system.
- This benefit gives you the opportunity to repay the mortgage you used to purchase your first property within the financial system.
Who can withdraw 25% of the AFP?
In general, all members of this pension system who have an Individual Capitalization Account (CIC) can take advantage of its benefits. However, if you’re still young and haven’t been a member for very long, you may think that age could be an impediment for you.
But that’s not the case! There are no age restrictions at all, so you can access this benefit at any time during your membership. Likewise, there’s no minimum amount you must have in your fund.
As you can see, withdrawing 25% of your AFP is one of the easiest ways to finance the payment for your new apartment . It’s a matter of visiting several real estate projects to find the perfect apartment for your budget and needs. Remember, your future property will be the place where you’ll spend the best moments with your loved ones.
Edifica Real Estate offers you the best apartment and office projects located in the best areas of Lima and other cities. If you’d like more information about our projects, please contact us and we’ll get back to you shortly.