03 października 2021

Certificate of earnings for the possibility of a mortgage

Certificate of earnings for the possibility of a mortgage

 

The certificate of earnings is one of the basic documents that must be submitted with the application for a mortgage. A certificate of earnings is required for all persons earning income under an employment contract. Some banks also require such a document for people who obtain income from a mandate contract or a contract for specific specific work. There is no one universal print. Banks have their own individual ways of calculating capacity. Therefore, each of them has its own designed certificate template. While working as a mortgage loan specialist, I met a dozen or so companies that fill in the employee's details on their own forms. Banks accept such situations, but the certificate must include all information from the bank's print.

In today's 'Statement of Earnings for a Mortgage' you will learn:

  • what is an income certificate,

  • how to properly fill in the form about earnings,

  • how banks verify and determine income,

  • what are the most common mistakes when completing the certificate.

 

 

 

How to correctly complete the salary certificate?

 

The main issue is the completeness of the document. You must complete all required fields and select all checkboxes. The certificate must be completed by an authorized person (e.g. HR, accountant, boss, proxy). The person completing the document must sign in the designated place, put the company seal and insert the date of completion. Some of the income certificates must also be signed by the employee applying for a mortgage. It is also forbidden to change the salary from gross to net and vice versa. Salaries must be calculated on the period that the bank requires. If the bank counts the creditworthiness of 3 months. It cannot be changed and data from a different period cannot be given.

 

 

Validity of the employment certificate

 

Employment certificates are not indefinite. The form is valid if it is not older than 30 days at the time of submitting the application. In literally a few banks, this period is extended to 60 days. This condition is met if, at the time of submitting the application, registering in the system or receiving it at the headquarters (depending on the bank), the document has not exceeded its validity period. Nevertheless, be prepared that the analyst has the right to ask for the certificate to be updated during the credit analysis.

 

Where to get bank forms?

 

Up-to-date forms should be provided by the person who arranges the mortgage loan. I do not recommend downloading from the Internet, even from the bank's website, because it happens that you find out-of-date forms or forms intended for a different product, e.g. a cash loan. You can contact me and I will send you the current print

 

How do banks verify the earnings certificate?

 

Each bank has its own income acceptance policy. In some banks, the certificate is compared with the income from remuneration from the statements. If your income is not transferred to your account, you may need to provide a certificate from the Social Insurance Institution on the basis of calculating gross contributions. Some banks also use telephone verification. An analyst or an authorized employee calls the employer to confirm the data from the certificate.

 

 

Bank statements

 

For the application, you will need to prepare bank statements that are affected by your salary. Depending on the bank, these can be just confirmations or documents that contain all the information. You can use the printout from electronic banking. It is important that it is a document classified as an electronic document, i.e. one that does not require a stamp. It must contain information about the account number and its owner. Statements must be generated in 3/6/12 months, which results from the bank's individual rules.

 

Certificate from the Social Insurance Institution on the contributions paid

 

This is the second way to confirm the legality and amount of income. You will receive the certificate up to 7 days from the date of reporting at the local branch of the Social Insurance Institution or immediately via the ZUS PUE website, if you have a Trusted Profile (not to be confused with an electronic signature). Downloading this document is not too complicated. It shouldn't cause much trouble, even for less advanced Internet users.

 

Cash deposit

 

This is where the problem arises. This is not the best solution when applying for a mortgage. Some banks, such as mBank and Alior, will not accept such income. If your salary is needed for your creditworthiness, it makes sense to ask your employer to change the way your salary is paid. In banks that accept salary payment in cash, you will have to provide a certificate from ZUS on the basis for calculating gross contributions, which I wrote about above.

 

How do banks calculate creditworthiness?

 

A certificate of earnings plus statements or confirmation from the Social Insurance Institution (ZUS) is the basis for acceptance and calculation of the amount of income obtained. It can be assumed that the bank will adopt the lower of the values ​​indicated on the income certificate or in the statements. It happens that employers fill in the forms incorrectly, reduce the income to be paid by various types of benefits (e.g. insurance, Multisport sports cards). While accepting the base is fairly straightforward, counting ability additions is more complicated. Bonuses, commissions, overtime, housing allowances, etc. has many of you. The ability to take into account these component variables depends on the internal policies of each bank. This can also be influenced by cyclicality. One very large commission obtained a month earlier looks different than the monthly periodic overtime. Unfortunately, there is no single linear answer for all of the banks. Counting creditworthiness between banks can show significant differences, which can even amount to tens or hundreds of thousands of zlotys.

 

 

Contract of employment

 

Banks rarely require a copy of an employment contract. This happens when there are errors or omissions on the income statement, or there is a problem with determining the actual income.

 

Employer's print earnings certificate

 

In my work, I have heard a dozen or so times that my client's employer refused to fill out a form of a salary certificate. Due to internal interpretations, the employer filled in information on employment and income on its own forms. It is permissible as a derogation, although the condition is that your own form contains all the details required by a given bank.


Statement of income

 

It used to be a much more frequently used solution, especially when the customer showed an above-standard own contribution. The bank, appreciating the lower risk of the transaction, agreed to the simplified financial analysis procedure. The borrower declared the amount of income, the time frame of employment, provided information that he was not on notice and was receiving a mortgage. Today, when the credit process is much more restrictive, the income statement requires mandatory confirmation of data on the statements. Most banks accept the declaration only for customers who have their salary credited to their bank account.

 

 

The most common mistakes

 

Every month, several dozen income certificates from various banks pass through my hands. Some mistakes are made multiply times, so I would like to point them out to you as well, and maybe your credit process will be faster thanks to that.

 

  1. All fields in the print are not filled in.

  2. Deletions, changes made with a corrector.

  3. No signatures of authorized persons.

  4. Changes from gross to net and vice versa.

  5. Out of date print.

 

 

 

Summary "certificate of earnings"

 

It might seem that completing the certificate is trivial and not worth such attention to write a blog article about mortgage loans. The reality shows, however, that this is a big problem. I have never counted how many income forms are wrong or incomplete, but I estimate it is around 50%. Incorrectly completed income statement is a suspension of the process, lower creditworthiness, and in the black scenario, even a negative decision. I hope that my entry, which is seemingly insignificant, will help you in the credit process.

 

Remember that if you have any doubts, I am happy to offer you advice and assistance. Let's meet, you will find that my help in choosing the best mortgage can be invaluable.

 

Feel free to comment. Is the topic of credit analysis interesting for you? Let me know in the comment. Will be happy to help clarify all issues. It is important to me that every topic regarding the mortgage is absolutely explained.

 

CONTACT ME >

Mortgage broker

Michal Kaplon

os.Stefana Batorego 80

60-687 Poznan

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