Mortgage and employment is a great topic for analysis. Recently, I wrote about how to negotiate a mortgage, and met with great interest. Few people know that, contrary to appearances, a person earning 10,000. PLN per month may be less reliable for a bank than a bank with a monthly income of PLN 2,000. zlotys. It depends on the form of employment. What can you learn from the article?
What is the impact of employment on creditworthiness?
What is the most advantageous form of employment?
How to improve creditworthiness?
Creditworthiness is one of the factors influencing a positive decision on granting a mortgage loan. It should be remembered that not only the amount of income and financial obligations is important, but also the length of service and the form of employment. They can prevail, for example, in the amount of the loan granted. As we have already mentioned, the creditworthiness determines what amount the borrower will be able to repay with the income he receives.
Banks recognize that the best form of employment is an employment contract for an indefinite period. Only a few years ago, only such agreements were respected. However, the labor market is constantly becoming more flexible, so it was decided to meet the expectations of customers and began to honor fixed-term employment contracts as well as civil law contracts. Unfortunately, they have many restrictions and conditions that must be met before presenting them to a potential lender.
It may also be surprising that people running a business need to prove their income. Moreover, they must confirm their regularity and stability. Entrepreneurs whose monthly revenues are at a similar level are in a more favorable situation. But let's go back to how the types of contracts determine the chances of getting a mortgage. Below we present the basic rules for considering a loan application when discussing a mortgage and employment.
A mortgage and employment can have many dimensions. However, it can be bluntly said that people employed under an employment contract for an indefinite period are in the best position. Most banks require only 3 months of employment, although some may require a six-month internship with a given company. An employment contract for an indefinite period is also beneficial during work. People who change employment to financially advantageous and receive a new employment contract should not be misjudged. For the bank, it is not only a better financial situation for the client, but also quite a lot of certainty that he will be employed in the new company for a longer period of time. An employment contract and a mortgage loan are, generally speaking, a favorable situation in many matters. However, if you change your job, the credit process changes somewhat. In this case, be sure to read our article Mortgage and job change.
As we have already mentioned, such contracts were not accepted by banks a few years ago. The situation changed in 2007, when the financial crisis struck. In the case of employment under a fixed-term employment contract, banks require a longer period of service. It should be at least six months. The duration of the contract is also important, not shorter than six months. Of course, it is best for the duration of the contract to be at the time the employment contract is concluded. If it was concluded for a shorter period, the bank may request the employer to confirm that there are no contraindications to continue the employment relationship.
If you conclude a fixed-term employment contract, which also includes a trial period, you will not be able to get a mortgage. However, it is beneficial for the client to include the trial period in the length of work experience. An equally important issue is the issue of applying for a loan during the maternity leave. This aspect of credit is described in the article Mortgage and pregnancy.
When discussing a mortgage and employment, you cannot ignore the issue of entrepreneurs. Self-employed persons are the least trusted by banks. Most often, they have to document even a two-year period of running a business, in extreme cases three years. Importantly - when calculating creditworthiness, the average salary from the last year or two is taken into account. The bank pays attention not only to average wages, but also to the ratio of income to costs generated by the owner. Entrepreneurs who have obtained income at a similar level over the last two years are in the best situation.
To sum up, in practice, each form of employment more and more often gives a chance for a positive consideration of the application for a mortgage loan. Having knowledge of the employment requirements, you have the opportunity to take the appropriate steps that will allow you to obtain a positive credit decision. If you want to learn about this thread in detail, we invite you to read the article mortgage and business activity.
According to the Mortgage Act, you will get a mortgage in Poland only in the currency in which you earn. Therefore, foreigners in Poland cannot always apply for a loan to buy a flat or house. Moreover, foreign currency loans can now be obtained practically only in EUR and USD. This again narrows down the selection even further. People residing permanently outside Poland and settling their taxes outside our country also have a harder time getting a loan. Many banks do not accept such a situation in their lending policy.
All arranging things, contrary to appearances, is the most efficient way to organize. It is worth finding a professional credit office. Of course, you can use our help. Our Credit Advisor is at your disposal. Every day, week and month we help our clients to obtain the cheapest mortgage loan. A credit expert is a very responsible job, we do it with full commitment. We are happy to share knowledge, an example of which is this article and my entire blog. On behalf of my team, I invite you to a meeting from our office!
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.
Mortgage broker
Michal Kaplon
os.Stefana Batorego 80
60-687 Poznan
Strona www stworzona w kreatorze WebWave.