A loan is good, only if you have your own savings and if you manage to increase your income, or reduce your current expenses.
A mortgage is a big responsibility and it is good to think very carefully before taking this step.
- Do you need that apartment?
- Can you pay the monthly loan installment, whatever happens? Is the monthly rate lower than the rent?
- If you go to another city tomorrow, can you rent it?
- And if so, does the rent you can get cover the credit rate?
At a time when banks grant loans on more restrictive terms, and the real estate market does not offer a clear picture of the value of the real estate, it becomes a real adventure to buy a house on credit. Here are some tips to increase your chances of a home loan, based on online customer experience.
Choose a bank that requires as little down payment as possible
You must contribute an amount to any mortgage loan in the form of an advance. It is established as a percentage of the assessed value of the property or the sale price. Currently, banks require an advance between 0% and 35%.
Thus, in case of an advance of 25%, if the building will cost 60,000 you should contribute from your sources with 15,000 euros, the remaining 45,000 being obtained from credit.
However, if the appraiser considers that the building is not worth more than 50,000 euros, the bank will not grant you more than 75% of this amount, respectively 37,500. Some banks will also request an additional mortgage, in addition to guaranteeing the loan with the purchased property.
Choose a bank that accepts as many co-debtors as possible
If your income does not allow you to get all the credit, try to find a bank that will accept as many co-debtors as possible. In general, they must be relatives or have the same address in the bulletin. Recently, however, banks have become more permissive. For example, people who are not relatives or who do not live with the applicant are also accepted.
Present from the beginning all the documents requested by the bank
The credit file must be as complete as possible so that you receive an answer from the bank as soon as possible. Ask the credit officer twice if you do not need any more documents before submitting the file. If obtaining an answer from the bank is too long, there is the possibility of not obtaining the necessary financing within the term imposed by the seller of the property by pre-contract.
Look for a bank that guarantees the offer from pre-approval
Given that changes in interest rates or commissions appear more and more often in banks’ offers, some of these changes may be applied even if the file has already been submitted to the bank.
Thus, the amount you could have obtained under the conditions at the time of applying may decrease.
Pay the seller an advance as little as possible
However, if you are required to submit the loan application and the real estate documents (necessary for the bank), try to negotiate with the seller the payment of an advance as small as possible.
In times of declining real estate market, sellers are more willing to provide housing documents even for a small amount.