Applying for a mortgage today is one of the most effective ways to get the desired four angles. However, in order to successfully obtain such a commitment, you must remember to meet certain requirements. Among them, there is often a payment of a percentage of the apartment’s value. Is a loan possible without own contribution? Here is the most important information.
Along with subsequent changes, which over time appear in human life, at some point there is a need to acquire your own apartment. Considering the most common expenses incurred in life, this is undoubtedly one of the most expensive. Some bear it only once in their lives – after all, their own apartment is to be the only one place in the world.
Loans as a popular way to buy your dream apartment
These sample amounts are usually the minimum “range” to buy flats in many large cities. Sometimes, you have to spend even more, living eg in Warsaw or looking for a very large area in a good location of a large urban center. It is no different with houses – the cost of purchase or – worse – construction and finishing, requires huge financial outlays that will be difficult to obtain from current expenses or even savings.
Having a place to live, however, is one of the basic human needs. Those who do not want to live with family members or rent for years places that will never be their own, therefore have a challenge. The disproportion between the cost of buying real estate and earnings means that in order to buy real estate you have to look for alternative ways to finance them.
Some people can count on family financial support, which depending on their financial situation can help cover part or even the entire cost of buying a property. Others, in order to earn as much as possible as soon as possible to buy an apartment, decide on the still popular economic emigration to countries with clearly higher incomes. After exchanging it for dollars, record holders can accumulate the value of living in a large city in a few years.
In addition, there is a third, extremely popular option used around the world. Taking out a mortgage from a bank may also be an effective way to finance your apartment purchase. Almost 27,000 people took advantage of this solution in the fourth quarter of 2018 alone 2. Incurring a commitment allows you to quickly become the owner of your dream apartment, although the road to obtaining a loan sets quite restrictive requirements for the consumer.
What requirements do you have to meet to get a mortgage?
In order to obtain a mortgage, banks set specific requirements for consumers. Each of them is necessary so that the road to applying for the commitment is open. Only after the fulfillment of the initial conditions, it is possible to determine, eg the potential loan amount that can be granted, the repayment date, the amount of the monthly installment and other additional parameters.
What client profile is desired by banks if they want to obtain a mortgage? First of all, good credit standing is important. This is the basic factor that often determines the bank’s decision to grant a loan.
The creditworthiness consists primarily of the result of the verification of the financial history in the credit score register. This popular database of information on the state of repayment of bank liabilities and loans, allows to measure in a reliable way how in the past a given consumer was dealing with the settlement of obligations. At credit score, you can check for what amounts and for how long loans and credits were taken, as well as whether they were repaid on time. credit score discloses all financial arrears or debts related to the aforementioned type of liabilities.
Good credit standing is not everything!
In addition to verifying your credit history, it is also important to have high earnings in combination with expenses and other liabilities. During the consumer verification, the bank will also check information on employment. We are talking here about the insight into the amount of income and its regularity, the duration of the contract at work and its type (order, employment, etc.). Earnings can be checked in various ways – eg through an account statement from the last few months.
In addition to your earnings, you will usually also need to provide the amount of your monthly expenses and commitments. For example, it could be eg expenses on bills, family members, telephone subscription, car leasing etc. The approximate amount of how much is spent on everyday life is also important. When comparing earnings with monthly expenses, there must of course be adequate space for a potential loan installment. The bank will not trust the consumer for whom repayment of the loan may prove to be an excessive monthly burden.
These two points are very important and sometimes crucial when deciding to grant a loan, but that’s not all. When applying for a mortgage, the so-called own contribution. We already devote the following part of the article to all important information about it.