Mortgage in Norway 2021 may be within your reach.
We discussed this topic with the guests of our Thursday broadcast. They were Agnieszka and Agata - Polish representatives of the Norwegian bank. We talked live about when a mortgage loan can become a mortgage, when such a commitment can fulfill dreams, what are the requirements and what solutions are dedicated to people who want to enter the Norwegian real estate market and about many other things. You can find the transcript of the entire conversation below.
Own house in Norway
For some people the purchase of their own property is an investment, for others it is a pure investment. In many cases, however, the two are intertwined. However, this decision is often postponed. The reason is the clearly defined requirements that must be met in order to obtain such a loan. As our guest Agata says, they are not too high, but unfortunately - obligatory.
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Mortgage loan in Norway - requirements
One of such requirements is the obligation to earn a steady income based on an employment contract in one place. A common problem is the lack of permanent employment. The bank usually refuses to grant a loan even if the person applying for it works a lot and earns on average more than applicants employed in one establishment.
Banks accept different incomes
It is worth emphasizing that banks accept various types of income, including bonuses, bonuses, income from own activity, from contracts, from hourly work, from renting, etc. Importantly - when analyzing financial possibilities, the income from unemployment benefits and other social benefits is also taken into account.
Credit history
Important information for people applying for a mortgage is the obligation to have a credit history. In practice, the longer it is, the better. The main issue, however, is whether the applicant was reliable and timely in its repayments. Any complications and delays in repayment of installments may reduce creditworthiness.
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How does the bank handle credit history?
Banks usually require a three-year credit history. Sometimes, however, it is enough for the applicant to stay in Norway for at least one year, have a steady income from one contract or stable income from several other sources that he is able to document. He can then count on a positive credit decision.
However, this story does not have to be flawless. Such a commitment may also apply to people who have had problems with the timely repayment of their debt in the past. For some banks, this is not a reason to refuse a loan. This flexibility is what distinguishes this financial institution in the Norwegian market.
Mortgage loan in Norway 2021. Equity
An equally important requirement is the obligation to have your own capital. As Agnieszka claims, this is generally the biggest problem, because not every applicant is able to show sufficiently large savings for the bank to issue a positive loan decision.
How to get capital?
It is good to know that there are different ways to get equity capital in Norway. If a specific person does not have sufficient funds accumulated on the account, they can either ask their friends to borrow them or use one of the solutions, eg StartLoan.
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Mortgage loan in Norway 2021
Advisors always recommend that you submit an application to the commune in which the applicant wants to live, so that it would grant such a loan for own contribution. At the same time, do not be discouraged in case of refusal. It is worth trying to submit such an application to another commune that can provide this type of support.
It may happen that even the commune that rejected the loan application once will accept it, e.g. in a month. This is due to the fact that such communes have a limited budget and predetermined expenditure plans for a given year. However, in a month, two or a half years, the situation may change, and as a result, it will have the right to grant such a loan.
This is not the only solution
Another way to get equity capital is through a consumer loan. However, before taking it, you should be sure that the applicant will be able to pay off two obligations - a loan for own contribution and a mortgage. Although this solution is not recommended by bank advisers, using it is not a basis for refusing a home loan.
If you have questions related to the car loan. Would you like to check your credit options or refinance your loan - contact ——–. works as a senior financial advisor in the company Eiendomfinance and provide free assistance in the aforementioned matters.
Security in the property you already own
Another solution that allows you to obtain equity is securing the loan with another property. The applicant does not have to be its owner. It can be family, acquaintances or friends. This is often practiced, for example, in the case of young people who leave the family home, and their parents are able to help them buy their own apartment. The real estate must be located in the territory of Norway.
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Take control of your credits
However, there may be a situation where the applicant has found a great opportunity to buy a house that requires major renovation. In these circumstances, he may avail himself of a consumer loan, which he will show as equity when applying for a mortgage. Within two or three years, such a person is able to renovate the whole house on his own and sell it at a higher value, and spend the excess money to buy a better house in a better district or a flat of a similar standard and partially repay the loan.
Avoid debt loops
However, as our guests warn, it is worth conducting a detailed analysis of expenses before making such a decision. It may turn out that the borrower will not have the appropriate financial resources to renovate the house in which he wants to live. As a result, it incurs further commitments for this purpose. The consequence of such action may be the loss of the ability to repay installments, as a result of which such a person will get into serious financial trouble.
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Mortgage loan in Norway 2021. New country, new life
It is worth knowing that when we move to Norway, we start "life anew". Therefore, if a person has experienced delays in paying off a loan or settling bills in Poland, they will not affect the reduction of creditworthiness in Norway. Provided that these cases do not concern offenses or crimes prosecuted ex officio. The Kingdom belongs to the Schengen Area, and therefore all information about such events is automatically transmitted and they may prevent the bank from granting a mortgage.
