When apply for a mortgage, clients must prove their creditworthiness. In the simplest terms, it is the ability to repay it with interest at the appointed time. This is a condition deemed necessary to obtain a loan, because it is a basic safeguard for the bank that the borrower will be able to pay his debt. In some cases, it is possible to incur financial liabilities of people who have material collateral (eg mortgage) but insufficient creditworthiness. In this case, the given real estate is charged with the right to be split by the bank as a result of credit risk, which is the loss of the borrower’s financial liquidity.
What affects creditworthiness:
- the amount and source of the borrower’s income
- any debts due to other loans or credits
- the amount of the loan (mortgage or cash) requested by the client and the loan period as well as the type of installments
- credit history in economic and credit information databases, as well as in the Polish Bank Association
- the age of the applicant as well as his marital status, the number of dependents and the number of people in the household
- own contribution
- possible loan collateral
How much you need to earn to get the loan amount requested
When analyzing the creditworthiness, the bank must estimate the maximum installment amount. Will the borrower be able to pay the monthly obligation take into account expenses necessary for maintenance and any other charges due to the liabilities held. For example, a family of four, whose monthly net income is PLN 7,000, can obtain a loan for 30 years with a maximum amount of approximately PLN 550,000, with a monthly installment of approximately PLN 2,600. Assume that she has no other financial obligations. On the other hand, when the number of family members is 3 and the monthly net income is PLN 6,000, the creditworthiness may reach about PLN 480,000 at the same loan term and with the assumption that it has no other loans or credits.
In assess creditworthiness, the Bank uses, inter alia, earn and other liabilities to be repaid.
A very important factor increase creditworthiness is the loan period next to the income itself. The longer the higher the ability is. Therefore, the question should not always be asked how much you should earn to get a mortgage.
Before we make a decision about taking out a mortgage, it is worth calculate how much we will be able to use our income for installment due to its repayment. This is important because the interest rate on the loan changes, it may be lower for a few months and by the next increase so that our monthly installment will be much higher. Although the bank also performs a similar calculation before agreed to grant a financial commitment, our own recognition will allow us to make a final decision on the amount of the loan (maybe it should be slightly reduced?) And the loan period.