Month: December 2019

  • December 31, 2019

    Housing loan and partnerships

    There are no obstacles for non-married couples to apply for a joint loan. Most banks calculate the cost of living identically, irrespective of whether the couple is in a partnership or marriage. Two persons applying for a loan for the purchase of real estate can be considered as one household. Creditworthiness can be determined at the same level as for marriage. However, not all banks have a uniform approach. – There are financing institutions that treat a partnership as two separate households. The result is a higher monthly cost of living This, in turn, causes a decrease in creditworthiness, Every credit advisor should know about this, it is especially important in the context of the client’s credit preparation. Whether a loan is being applied for by marriage or an informal couple is not important for assessing the bank’s risk. Some banks, however, will assess the creditworthiness of marriage more favorably than the couple forming an informal relationship. Risk assessment is even more difficult for single people. Generally, banks assess people who are in a formal or informal relationship better, because the risks related to, e.g. loss of work, health and life are divided into two people – says Piotr Firlej and gives an example that in one of the largest banks a couple of borrowers who are in an unmarried marriage and dependent children, with a total income of USD 5,000 net (loan period 30 years), has creditworthiness of USD 480,000. For a couple who are in an informal relationship in the same financial situation, it is already USD 420,000. What if parting? I always discuss with clients all possible options for obtaining financing and their consequences in the future. If two people join the loan, you must always take into account that sometime in the future, even if today...