The 3 requirements you should meet to apply for a mortgage after covid-19
With the arrival of the new normality, it is usual to resume the plans that we have been postponing for the last three months. Among them could be the purchase of a home. If this is the case, meeting the requirements to request a Phh mortgage will be essential to obtain the best conditions. Although, having recurring income and being able to boast of history free of defaults are still the star requirements, now banks are looking closely at the situation of each client. In the following lines, we will comment on the three requirements that we must meet to apply for a mortgage loan in this unusual scenario of de-escalation.
Not having suffered an ERTE
Since the confinement began, nearly four million people have suffered a Temporary Employment Regulation File (ERTE). If this is our case, on the one hand, the bank could understand that the job we hold is not very stable given the circumstances.
On the other hand, even if we have resumed our usual routine, we should assess whether our economy is going through a good time to buy a house and if we could have problems paying the mortgage payments in the coming months.
For example, if we have an income of about 2,000 euros per month, we could weigh the possibility of assuming a mortgage of at most 700 euros per month. On the other hand, if we had other current loans (car, credit cards, deferred payments, etc.), it would be advisable for the sum of all the installments not to exceed 35% of our income.
Do not work in a ‘vulnerable’ sector
Experts warn that the harshest economic effects of the coronavirus are yet to come. In fact, the Bank of Spain forecasts that unemployment could reach 20% by the end of 2020. Therefore, keeping the job after confinement does not necessarily mean that our position is not in danger.
In Spain, there are banks that are already beginning to assess the risk of granting a mortgage loan based on the economic sector to which each applicant belongs. And, of all the sectors, we could say that tourism and hospitality are the most exposed.
REMEMBER! If at least one of the owners has a stable job, the chances of signing a mortgage will be greater.
Be up to date with payments despite the state of alarm
The last requirement that we will have to meet if we want to obtain the best conditions to finance the purchase of a home will be to be able to demonstrate that we have a solvent profile.
In this sense, if during the last months we have accepted a moratorium to postpone part of our debts or we have not religiously paid the installments of other loans, the bank could be reluctant to accept our request.
To finish, it is important to clarify that each entity has its own risk policy and, therefore, the arguments for assessing risk in some banks could be more or less demanding than in others. There is no doubt that having a good financial profile will considerably increase our chances of signing a mortgage loan with the best conditions.