Low mortgage rates have made many people want to buy real estate. House prices have become very high nowadays, so the amount of home loan you want to take out is higher.
The size of a home loan can be influenced by several factors. The most important of these are income, cover or, if that is not enough, supplementary cover. In this article we have collected the factors that influence the amount of a home loan.
Factors affecting the amount of a home loan
There is income legislation, meaning that banks can no longer provide mortgages on real estate collateral only, but must also consider income.
The rules of income analysis are very complex because there are many types of income. It is different for each bank to accept what income they accept and the rate at which they allow it to be debited. However, the JTM rule, which limits the payload of income, must be met by all financial institutions. The installment payment may not be higher than 25% of the monthly net salary, the limit is below 400 thousand HUF, and in case of income above 30%. And for mortgages with a fixed repayment period of five to ten years, the limits are 35% and 40%, respectively. The 50 and 60% limits apply only to fixed mortgage loans for a minimum period of ten years or until the end of the term. As of July 1, 2019, the decree allows for a monthly income of HUF 500,000 instead of the current $ 400,000.
The minimum and maximum loan amounts are determined by each bank. The minimum loan amount usually starts at between 500,000 and 1 million HUF. The maximum loan amount can be up to HUF 20 – 40 million, but there are examples of banks that have not exceeded the ceiling.
How much you can take out a mortgage depends on the value of the property being offered as collateral. Some banks set the maximum amount of home loan that they can accept as a percentage of the market value they set, while others set it as a percentage of the collateral value or escape value.
The turnover value assumes the bank at the time of preparation of the valuation that this property is current fair value. Itelbiztosítéki h The value determined by the appraiser of real estate sales value for the bank. Usually, the value of collateral is 10-20% cheaper than the market value. The value of the collateral is also called the escaping value , so if the property has to be sold quickly due to an unexpected reason, it is usually only 10-20% cheaper than the market price.
It doesn’t matter to you what value the bank calculates the potential amount of the home loan from, just ask if the amount is enough for what you want to buy.
There are two basic rules:
- By law, in case of a forint-based home loan, the amount of loan to be borrowed may not exceed 80% of the market value of the properties offered as collateral.
- Also, a certain percentage of the collateral value of a home loan, as determined by the bank, may not exceed the amount of credit requested. This limit varies from bank to bank (usually 40-90%).
If the property does not provide enough cover for the home loan you are applying for, most banks have the option of using a replacement property as collateral. The requirements for margin cover are the same as for primary margin. Here, too, there is a minimum transaction value below which a property cannot be included in a home loan as collateral.
It is common for a client to offer his parents’ country house or apartment as collateral, and after valuation it is found that he typically has a much lower price than in Budapest.