Grounds for refusing a mortgage
The financial solvency, employment history or age of the person asking for funding are key points to obtain a credit
Given the current economic situation, at the request of a mortgage, banks very closely evaluate the risks of possible grant and the real possibilities of the claimant to repay the loan. The increase in delinquencies among bank customers has led to greater emphasis on the requirements. Banks and thrifts seeking various documents such as the working life of the owner or the declaration of their consumption patterns. Furthermore, the large accumulated stock of housing, it is usually denied a mortgage for a property that is not in your portfolio.
Harshest conditions
The credit tap remains closed after the outbreak of the crisis afflicting financial institutions. Hardly grant mortgages for the purchase of housing and credit requirements have tightened further.
While both the requested documentation as the main reasons for denying or granting a mortgage vary among financial institutions (and even between offices of the same company). The following would be the most common:
- DNI or NIE. Check the data banks of the applicant, in particular the place of residence and age. The first reason for refusal may come with age. Whether you’re too young, lack of job security, as if it is very old. In the latter case, the lower life expectancy, the decline in retirement income or increased insurance risks linked to the loan, they play against.
In general, banks grant mortgages to a period exceeding 40 years, provided that the applicant’s age add this deadline does not exceed 70 or 75 years. Today, it has been further tightened, and people with 45 years there are difficulties, since it is unlikely that the bank agreed to provide an amortization over 15 years.
It also influences the type of mortgage you want to apply as for amounts exceeding € 150,000 harden and requirements, as the periods get longer, the chances are reduced.
- Working lives. With this document, banks and professional can assess the stability of the applicant and their economic future. For the unemployed, temporary workers or discontinuous mileuristas, who do not have savings or solvent guarantors, it is virtually impossible to access a mortgage.
- Bank statements. Reflect the consumption patterns of the applicant. The institutions thus have a very valuable documentation to assess their ability to manage their income and expenses (debits, insurance, fees …). Background of the red, negative balances or financial difficulties make constant the mortgage application is denied. Having many small loans or delays repayment of such favors also the bank’s refusal.
- Delinquencies. Banks and should ensure that the user is not included in lists of defaulters of various products (loans, accounts, cards …) or other sectors such as telecommunications. Belonging to one of them (RAI, ASNEF, Equifax) is grounds for denial of access to credit.
- Guarantors. Having people around that can respond to the agency debt with their income and assets in case of default is one of the most common applications for banking companies. Guarantors must demonstrate its solvency and financial ability to accept them.
For couples, to jointly seek funding reduces the risk of default in the eyes of the entities. The mere fact of being single grant more complicated, as the safest bank sees the participation of a second person on whom it falls off the mortgage in case of death, personal or financial misfortune.
- Properties. Should be presented the title deeds (purchase agreement, simple note date of registration of ownership of the property, receipt of IBI …), which will enable the credit institution to know what assets could seize in case of default.
- Housing stock. It is likely that if funding is requested for a home that is not owned by the entity which requested this refuse it. Given the high housing stock banks and always seek out and encourage him to access to finance these properties.
