Are you going to buy a house? In this post we will tell you what requirements the financial institution will study and analyze when applying for a mortgage before approving your application and lending you the requested amount.
Although the requirements vary depending on the entity from which we request the money, there are some that are common to all of them. Any bank will want to know, in addition to your personal data (age, marital status, number of members of the family unit), the documentation that proves your income, job stability, savings or the type of home you want to buy.
1. Your income
One of the first things that the financial institution will analyze when you apply for a mortgage loan will be your net income .
The bank will ask you for several documents depending on your employment situation: the last three pay slips, if you are an employee, the last three quarterly IRPF payments and registration for the IAE (Tax on Economic Activities) for the self-employed, in addition to the last income tax return or any other source of income you have (income received from renting other properties, etc.).
The objective is none other than to know if you have enough income to be able to pay the mortgage installments comfortably. As we have seen on previous occasions, the mortgage installment should not exceed 35% or 40% of your income.
2. Your job stability
Another requirement that can help a bank grant you a mortgage is the fact that you have to prove your job stability (and therefore, financial stability).
When applying for a mortgage, institutions usually value positively if you have a permanent contract with several years of seniority or if you are a civil servant.
3. Your savings
The bank will probably ask you to justify the savings you have available to cover the part not covered by the mortgage (usually 20% of the purchase price of the home) and the expenses – property appraisal, notary, property registry or other management expenses – or taxes such as VAT.
4. The type of home you want to buy
Finally, the entities will also analyse the type of property you want to buy (house, flat), its condition and location. In any case, it will be necessary to carry out an appraisal of the property through an approved appraisal company.