Will I be the client they are looking for? Will they mind that I don’t have a very high salary? How much savings will I need? Will they realize I’m on the delinquent list? These are just some of the most frequent questions that could plague us if we are thinking of asking for a mortgage. And it is normal, since assessing whether we meet the requirements to apply for a Phh mortgage loan will allow us to anticipate what may happen and look for other alternatives. Next, we will review the four things that banks fall in love with and we will advance what could happen if we do not find the profile they are looking for.
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How much savings do you have?
The first condition that we must assess is whether we have enough money to cover part of the price of the home plus the costs of the sale. In general, banks usually finance up to 80% of the value of the house, and the costs of the notary, the agency, the registry and taxes range between 10% and 13%.
In practice, for a property of 150,000 euros, we will have to have saved about 45,000 euros: 30,000 euros to buy the house plus about 15,000 euros to meet expenses.
Do you have a stable job?
Banks love customers with a permanent jobs and if, in addition, they have been working for the same company for a few years, they like them even more. To verify it, in addition to the employment contract, the finance company could ask us for our work history to find out about our professional career.
In these times, banks could also consider it less risky to offer to finance to clients who work in sectors less exposed to the crisis caused by the coronavirus.
What is your monthly income?
Apart from having a stable job, banks are fighting to attract those customers with recurring income. Entities normally assume that the more we charge, the less likely it is that we will not be able to meet the mortgage payments.
In addition, the level of monthly income could also be a determining factor in negotiating lower interest rates. In fact, many mortgages offer a discounted interest rate for those clients with a salary of more than 2,000 euros per family unit.
Do you have any outstanding debts?
Lastly, having an established job and receiving a competent monthly income are advantages that will go unnoticed if we are registered on a list of defaulters. Therefore, being able to boast of a credit history free of defaults will be an essential requirement if we want to sign a mortgage loan.
In the same way, hiding too many debts behind a good profile will not help us much if we want to sign a mortgage loan.