Youth loan for my first apartment – What are the possibilities?
Every time we apply for a bank loan, we must prove our creditworthiness. The income of the potential borrower will be of key importance in the verification process. We will consider both their height and source. It does not matter whether our interest is credit for young married couples or for a pensioner. This is one of the main factors that always affects whether we have a chance for a positive decision of the bank.
Young people and credit chances
I think everyone is well aware of the situation on the labor market. Young people, without specialized education and professional experience, rarely can count on employment under an indefinite employment contract and high earnings. It must be lucky for us to find a dream job with a high salary at the first shot. Also, completed studies do not determine that immediately after graduation we will receive a well-paid contract job for an indefinite period. What’s more, both these factors must go hand in hand. Even the high earnings that we achieve if they are not stable are also not highly rated by the bank.
What does this actually mean in practice and applying for a loan for young people? Even a contract of employment amounting to a large amount, which is concluded for a fixed period, in the eyes of the bank does not guarantee stability, especially with long-term mortgage loans. Even lower than a fixed-term employment contract, mandate contracts are assessed. And without documenting the continuity of orders, our chances of a mortgage are even lower, not to say zero. This means that, in addition to remuneration at an appropriate ceiling, a form of employment plays a big role, in which the indefinitely highest employment contract wins. The above allows us to draw conclusions that it is not that easy to get a loan for young married couples. However, is it impossible to get additional financing to buy your first apartment?
How to increase your chances of getting a loan for young people
As we mentioned at the beginning, before we receive a loan in a bank, we must pass a credit check. Of course, we can start with negotiations with the employer. Changing employment conditions and increasing salary, or finding an additional source of income, may not be impossible, but certainly very difficult to implement in a short time. So how do you increase your chances of getting a loan for an apartment for young people? A more real way out of a situation that will allow us to increase our credit standing is definitely taking a loan with another person, or even people. Of course, there is probably no doubt about credit for young couples. Then two people apply for a loan, which increases their creditworthiness and reduces the overall cost of living. How is this possible? In the bank’s assessment, the average monthly cost of maintaining a single-person household is USD 1,000. Each subsequent person is only 300 dollars.
In practice, this means that the cost of maintaining a two-person household per person is only USD 650. In turn, revenues are not only the amount of one salary, but two. What’s more, it is also an additional solvency guarantee for the bank. If one of the spouses loses their job, the remuneration of the other will remain. Financial liquidity, although it may be strained, will continue to be maintained, which we cannot say if a single person loses his job. However, not everyone is aware of the fact that you do not have to be married to apply for a youth loan. On the same terms, the bank will treat us if we take a mortgage with our partner, with whom we are not in a formal relationship.
The bank takes into account not the status of our relationship, but the amount of income and expenses that we incur to maintain the household. If it consists of two people’s salaries, we increase our chances of getting a loan for young people. How else can we increase our credit chances for young marriages? People entering adult life can increase their creditworthiness by adding third parties to the commitment. They can be parents, grandparents, siblings, as well as unrelated people who express such willingness and have creditworthiness at the required level. In this way, we have a much greater chance not only of credit in itself, but also of much larger amounts of credit for young people.
Flat for young – conditions
The slogan “flat for young people” can be associated primarily with the government program, which once broke popularity records. The apartment for young people program operated in the years 2014-2018 and was addressed to people who were under 35 years of age and planned to buy a new apartment on credit. Of course, there were also a number of other conditions to be met. Why did he enjoy such interest? All this thanks to the fact that after positive verification we could count on co-financing our own contribution.
In addition to creditworthiness at the appropriate level, the need to collect own contribution is a key problem in the case of loans for young people. The minimum amount of own contribution required by the bank is 10% of the property value. Many establishments set it at a ceiling of up to 20%. Given the prices of apartments, this is not a small amount.