You have decided to finally solve the housing issue, you have found a property in the perfect location, you are satisfied with the size and layout of the rooms in the given house or apartment, but only when we find what suits us do we come to the main problem – the high price.
Buying real estate without a home loan today is almost impossible, and how to get a loan and what are the conditions for obtaining it, we reveal to you in a short guide:
Credit check
Regardless of which bank you choose, the first item that the officers will examine is your financial ability to regularly pay your monthly obligations after the loan is approved, or more precisely, to pay the bank the principal and the corresponding interest every month.
When evaluating the creditworthiness, the monthly income of the potential borrower is taken into account, as well as the credit card debt, the allowed minus, as well as whether the future debtor may have another loan that is deducted from his monthly salary, reports Sasomange.
Employment
Another main factor for submitting a request for loan processing is that you have a contract with your employer for an indefinite period of time and that you work for the same company for a certain period of time (three or more months, depending on the bank’s policy).
Participation
In order to take out a housing loan, the buyer of real estate must set aside a certain amount of money for participation, which in most banks today amounts to 20 percent of the agreed purchase value of the real estate.Â
For example, if you take out a loan in the amount of 80,000 euros, and the mandatory down payment is 20 percent, this practically means that the bank pays the real estate seller the amount of 64,000 euros, while you give him the remaining 16,000 euros.
Age restriction
The minimum age for taking out a housing loan is 20 years of age, while when paying off the last installment of the loan, the borrower can be no more than 70 years old. However, this limit does not apply to all banks.
Some banks have moved the upper age limit to 75 years, and there is a possibility that in the coming period it will be moved even to 80 years.
What can you do to improve your credit?
Bearing in mind that the bank focuses a lot of attention on your credit history, know that you can improve it if you regularly settle all due obligations to the bank. Incorrect or irregular communication with the bank worsens the credit picture, and all delays are reported to the credit registry and thus affect your future creditworthiness.
The length of the business relationship with the bank is also an important factor, that is, the regularity and length of business with the bank is a significant factor when making decisions about the client’s creditworthiness.
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