While applying for a mortgage, each bank follows its own methodology and is also limited by the rules and regulations of the National Bank of Slovakia (NBS). As for mortgage loans, banks are interested in three main areas, namely:
– the client’s creditworthiness,
– real estate,
– purpose of the loan
The minimum age for the applicant is in most cases 18 years.
There is no maximum age, but a person must have time to pay off the loan before the age of 65, sometimes an exception can be made – up to 70 years.
2. Foreigner’s income
Type of income – usually banks distinguish between basic income and secondary, additional income, which should not be the only type of income.
With the onset of the pandemic, banks started to be more meticulous at the client’s income. If the client works in the sectors most affected by the crisis (gastronomy, culture, tourism, etc.). he may face serious problems in obtaining a loan, some banks may refuse to provide a mortgage.
Minimum work experience in one place should be at least 6 months, in exceptional cases – three months (when starting work after a decree) When doing business, banks most often need at least one-year history, they often require information about two closed full reporting periods.
3. Type of employment
The ideal applicant for a bank is an employee who is employed indefinitely.
Banks give preference to university-educated clients because they expect them to find new jobs quickly enough in case of job loss. The income of a client with a university degree is higher than that of a client without a university degree.
5. Family status
The bank checks if a person is single, married or divorced. In most cases, the spouses have joint property, so both automatically enter into a credit relationship and participate in the repayment of the loan. In case of problems with payment, the bank will ask from the spouse not half of the unpaid amount, but the whole.
Each bank is interested as well in the existing as the past loan commitments of the client with each application for a loan product.
The bank checks the client’s history in the credit register, which checks not only the current state of clients but also the history of 5 years. Thus, each bank has information about what loans the client had and how timely he paid them.
The DTI parameter (Debt to Income) – says that the total loan load should not exceed 8 times the client’s annual income. For example, if a customer earns € 1,000 net and already pays out a consumer loan with an outstanding amount (principal amount) of € 5,000, the maximum amount the bank can lend to him is € 91,000. (€ 1,000 x 12 x 9 – € 5,000 = € 91,000).
DSTI (Debt Service to Income) is a parameter that states that each loan applicant must have (after deducting the installment plan and the cost of living) another 40% of the financial pillow. The size of payments on new loans cannot exceed 60% of the calculated amount.
For a customer who earns € 1000 net and already pays off the loan with a monthly installment of € 122, it is € 1000 – € 215 (subsistence minimum) – € 122 (existing installment) = € 664. The maximum repayment amount for a new loan is 60% of the amount calculated in this way, i.e. j. 398 euros.
You can calculate the possible mortgage amount on the website https://optivista.sk/hypoteka/ yourself.
A mortgage loan can be provided for various types of real estate: land, apartment, house, non-residential premises.
The value of the property affects the maximum loan amount that the bank can provide to the client, as well as the amount of interest.
The location in which the property is located affects the maximum loan amount. There are banks that focus on the “urban-type of the client”, and if the property is located in a district or regional city, they are ready to lend larger amounts of money than in a village.
8. Purpose of the mortgage loan.