With the crisis continuing to unfold, banks are being asked to lend less. The conditions for obtaining a mortgage are more and more demanding. So, if you wish to apply for a loan, here are the eligibility criteria to which the credit agencies refer to sort the suitors.
A minimum contribution of 20%
In order to discourage compulsive borrowers, they are asked to demonstrate their involvement in the real estate project it presents. The 20% personal contribution is mainly used to cover the various costs related to the loan. These include handling fees, but also notary fees for setting up the mortgage.
Healthy financial health
To borrow, it is imperative to present a healthy financial situation. That means income stability. Banks favor more people who benefit from a permanent contract. On the other hand, financial health is also assessed through the financial liabilities of the borrower. A person who has been the subject of a file at the BNB has little chance of seeing a loan request succeed, whether it is a home loan or consumer credit such as a personal loan or assigned loan.
A debt threshold to respect
The debt ratio must remain acceptable. The tolerable threshold is 30%. This means that if all of your debts and fixed charges exceed 1/3 of your income, you are considered to be at risk. It is all a matter of cases, however. If you take out a couple loan, the threshold may be reassessed up to 50 or 60% of the combined income.
Longer repayment duration
Short-term credit will be cheaper for you. You will pay less interest. However, you will have to bear high monthly payments. The risk of non-payment therefore increases when the repayment period is more limited. Banks prefer a longer term, 20, 30 or even 40 years so that the credit is more in line with your borrowing capacity and your repayment possibilities.
Tips & Tricks: Use a Mortgage Broker
As banks are increasingly reluctant and suspicious, it is important to rely on the help of a person who specializes in negotiating with banks and credit organizations. It is precisely the job of a mortgage broker who is responsible for defending your case. You will increase your chances of seeing your request succeed by calling on a broker who has privileged relationships with bankers.
Obviously, we will never stop repeating that you always favor credit comparators and carry out a loan simulation beforehand to find the best deals.