A single mortgage gives many lonely people the opportunity to receive financial support to buy an apartment. Is it easy to get such a loan alone or is it better to look for a co-borrower?
Independence and own apartment are a dream of many people. Those who start a family with their other “half” probably have a little easier. They can support each other financially and together they are responsible for finding a good apartment for themselves.
Singles can make each decision themselves, without agreeing anything with another person. They also have to deal with financial issues on their own. Couples most often have two sources of income, the single lives on one, their own salary.
Banks like co-crediting
Of course, it happens that the total value of both income in marriage may be less than one single salary, however, when planning to take a mortgage loan alone for a new apartment, it is worth knowing the position of the banks towards such situations. We’ve already discussed some of the factors regarding singles in the article Mortgage loan – for whom?
The more people who are responsible for a loan, the lower the risk that there may be problems with its repayment. When two people take out a mortgage, the bank assumes that it will be repaid from two salaries.
If one person suddenly loses their job, there is still another income. This is a positive situation for both banks and borrowers who do not have to worry about debt. If they lose one source of income, they will probably find it harder, but they will not be left without money with a second source.
In the case of a single, the situation is more difficult
If he takes the loan, he will be fully responsible for it and if he loses his job, he may have serious problems paying back the installments. Of course, it is the borrower who has to worry about where he will get the money, but the bank would prefer to avoid debt from its customers. The borrower’s financial conditions are checked very strictly at the beginning. His financial standing and credit history must indicate good financial standing and the least credit risk.
What does it mean? It’s best if the borrower earns at least the national average. Of course this is not the rule. Some banks still support people with lower earnings, however, the amounts of such loans may not be high and will be enough for a studio. For singles, a higher down payment is often required than for marriages. The single, which has its own savings, shows the bank that despite lonely financial management, it is doing quite well and can still save.
Currently, it is no longer possible to finance the apartment 100%, so each borrower, both single and pair, must have its own part. The higher these savings, the better the information for the bank and the greater the chances of a mortgage – the comparison tool will help you pre-select banks to go to.
Possible to increase the chances of a single person getting a mortgage?
Loan surety is an interesting option that will not only allow you to receive a loan, but can also significantly increase its amount. The guarantor can be a trusted person, most often they turn out to be parents with a certain financial situation. They can also become co-borrowers and help their child pay off a mortgage.
In both situations, the bank will treat the borrower with a greater degree of confidence and will be more willing to set loan terms. If the single’s situation improves significantly or after some time he wants to share the loan with another person (e.g. he gets married and starts paying it back with his spouse), he can contact the bank with a request to change the terms.
It is true that the bank is reluctant to give up its co-borrower, but exchanging it for another, especially if the spouse has a high income, may be attractive to the bank. However, it is worth considering whether changing the conditions is necessary.