The Federal Government announced, at the end oflast week, an increase in the value of properties that can be financed by theHousing Finance System (SFH), with resources from the Government Severance Indemnity Fund (FGTS). The change has already started to take effect on Friday (25). With the change, the value of the units rose from R$750 thousand to R$950 thousand in São Paulo, Rio, Minas and in the DF. For the other states, the maximum price is R$ 800 thousand.
In addition to expanding the financing limits, theNational Monetary Council (CMN), the highest body of the National FinancialSystem responsible for formulating the currency and credit policy, determined that all new SFH contracts have some degree of amortization in all parcels. According to the president of the Brazilian Association of Housing Borrowers (ABMH), Lúcio Delfino, the change ensures that the outstanding balance falls all the time. “In addition, it prohibits financing with negative amortizations when, at the beginning of the financing, the client sees the debit balance rise and only starts to amortize the debt later. This rule will apply from 2017. Operations approved by January 31 of next year may be completed by March 31 of next year, without the obligation to amortize the installments", he says.
Lúcio Delfino evaluates both measures aspositive. According to him, the increase in the value of properties thatcan be financed at lower interest rates is good news for the real estate market, especially for those who own used properties. "The novelty can improve the liquidity of used units and suspend the real fall in prices, a phenomenon that has been observed since 2015, with the readjustment of the price per square meter below inflation."
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However, as these are high-value properties, themeasure will have practically no effect on reducing the Brazilian housingdeficit, as the target audience has a greater purchasing power. “These are people who, in general, already have their own house and intend to upgrade”, observes the president of ABMH.
As for the obligation to amortize the debit balancein all installments, this is a major step forward forborrowers. "When the buyer takes a loan from the SFH to purchase a property, the outstanding balance is paid through periodic installments, composed of monthly interest, ancillary charges (insurance, administration fee, etc.), and the portion that effectively amortizes the capital (debt balance)”, he explains.
What happens today is that the buyer can opt forsome amortization system whose installments do not include the amortizationportion of the debt balance at the beginning of the financing. According to Lúcio Delfino, the most common example is the price system (or price table). “Such amortization systems are harmful to the debtor/borrower, as they generate more interest charges than in systems with higher amortization. The only advantage (if we can consider it that way) is that the installments are lower at the beginning of the contract.”
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On the other hand, we remind you that, in additionto interest, the debit balance is readjusted by the inflation adjustment indexchosen in the contract. “In the case of the SFH, this index is the TR (reference rate), which in 2015 and 2016 was above the average of previous years and has compromised the reduction of debit balances. With the decrease in the Selic (one of the factors used to calculate the TR), the tendency is for the index to fall again”, analyzes the president of ABMH.
For those who already have a loan, Lúcio Delfino'stip is to monitor the evolution of the debit balance on a monthlybasis. “If the debt does not decrease from one month to the next, or – worse – if it increases, the borrower must check what is happening, and take the necessary measures so that the debt balance falls back to zero at the end of the contracted ter ssss
