Is it always worth applying for a mortgage with your family?

Joining parents or siblings to a loan is often a solution that increases the creditworthiness and, as a consequence, increases the chances of getting the expected amount. However, can the immediate family always help? Unfortunately, often family relations with the employer or with the seller of the apartment can make it difficult or even cross out the chances of a housing loan.

Family company

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There are several situations when saying that family goes well only in the picture can also be translated into issues related to mortgage. The first is when a potential borrower works in a small family business run by a close family. Then you should undoubtedly expect a much more detailed verification of your income. As a rule, not only an employment certificate with information on the amount of income obtained is sufficient, but it will be almost necessary to provide other documents confirming income. The bank will ask you to supplement your account statement with the receipt of a salary, but you may also need to provide a certificate from the Social Insurance Institution together with information about the amount of the basis for calculating social security contributions.

In this way, it will be possible to determine exactly what the real income of each customer is and exclude the situation when the amounts entered on the employment certificate are not true. In particular, the bank will assess whether the level of income is adequate to the position held or duties performed. In addition, the client may be asked to provide information on income for a slightly longer period than the standard 3 or 6 months to check if the salary increase did not take place a few weeks before applying for a loan, which could give rise to the suspicion that the remuneration was artificially due to the loan , has been raised.

Loan for real estate bought from parents

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Lany Loan is not always helpful when buying property from parents or siblings. In this situation, some banks explicitly say that they do not credit such transactions. We will not receive a loan for the purchase of an apartment from a close family at Ammiah Bank. Other banks also reserve the right to more detailed verification of the entire transaction. Some of them reserve the right to verify the sellers in JKL databases. Others will credit such a purchase, but only if parents and children (sellers and buyers) run separate households.

In summary, the banks check whether the transaction is not limited to the mere transfer of ownership, but whether there is indeed a change of residence. In this way, banks defend themselves against granting a loan at the price of a housing loan, while the funds disbursed will in fact fulfill the role of a loan for any purpose, because everything “stays in the family”. Therefore, some institutions explicitly say that such a loan will be granted, but only on the basis of a mortgage loan, i.e. with a higher margin and a lower maximum level of LTV (loan to value).

“Family on its own” without immediate family

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The situation is different in the case of loans with interest rate subsidies. In this case, according to interpretations of the Ministry of Infrastructure “the Act excludes the possibility of buying real estate from immediate family members …”. Thus, if a customer applies for a loan in the Rodjun program, then they must use it to finance the purchase of real estate from persons not mentioned in the act (descendants, ascendants, siblings, stepfather, stepmother or in-laws).