If you are reading this text, you probably think about taking a mortgage alone. At the beginning I will tell you that it is possible and not so difficult.
How do i know that I have been a happy owner of my own. for almost a year, for which I took a loan myself. So I want to deal with the myth once and for all that banks look less favorably at singles applying for a home loan.
This is a myth! Banks grant loans to people with stable incomes
Low expenses and savings. So everything depends on your financial situation and not what your relationship status is. The fact is, however, that a housing loan for a single is a bit more expensive – due to the need to take out additional insurance against job loss.
What other myths are there about loans for singles? What conditions must they meet to get a mortgage? What amount of credit can they count on, and above all – how much will it all cost? I explain below!
Single housing loan – facts and myths
Single housing loan is more risky than a couple / marriage loan? This sentence often appears in discussions about loans for singles. Is it real Yes and no. What are the arguments?
- A loan for a single is more risky for a bank, because when the borrower loses his job, there will be no one to pay the debt.
It is true that a loan for a single is more risky than a loan for a marriage or a couple. First, because people in relationships are less likely to take risks. Secondly, because two borrowers are two sources of income. It is unlikely that two people will lose their jobs at one time, and thus – the loss of one source of income is not associated with a loss of financial liquidity. However, the banks have found a solution to this situation – people who take out a loan as a single person must take out additional unemployment insurance.
- It is more likely that the single will not pay back the loan.
Bank statistics show that this is a myth. First, people who have no family and no obligations are more flexible and adapt more easily to change. Taking up a new job in another city, or even a country, does not require so many changes from them – they move only themselves, not the whole family. Secondly, there is a high probability that the person will be in a relationship later, which will make it easier to pay off the loan.
- The couple have greater credit standing.
The fact, though not the rule, is that two borrowers find it easier to earn higher earnings. What’s more, couples have lower expenses – the cost of living is divided into two. The situation changes radically in the case of families with children – children generate costs, and until recently they did not bring any income. Currently, banks include government support from the Family 500+ program in their income, which increases the income of families with children, but does not cover all the costs that children generate, so children still reduce creditworthiness.
How do banks check the single-borrower?
Just like marriages, families and couples – they collect data, including monthly income, expenses and liabilities, credit history, assess scoring , calculate ability. Banks use analysis that has two stages. The first one consists of collecting information on creditworthiness and credit risk, and the second – verifying the acquired material. What exactly are they analyzing?
- occupation and seniority,
- type of employment,
- the frequency of changing jobs – how long have you been employed by your current employer, how much time did you work for the previous one,
- residential status – not only if you have your own house or apartment, but also how long you live at a given address and in which district,
- marital status and age,
- amount of monthly income,
- number of dependents,
- balance of bank accounts,
- contracts with mobile telephony,
- owning a car
- owned payment and credit cards, credit limits etc.,
- life insurance.