The way to your own home, in principle, always leads through a bank. The first question to ask yourself, when dreaming of your four corners is how to finance the purchase. The way the mortgage market is organized influences our capacity to realize our plans. How it looks in Denmark?
Credit capacity, personal data collection, loan application, loan decision and finally loan activation can all be processed with one loan consultant or officer.
The loan itself may consist of a couple of elements (see Example 1), which can be own contribution of the loan petitioner, the Realkredit loan and a bank loan. The higher the contribution, the lower the cost and the cheaper the loan in the longer term perspective.
Realkredit stands for a non-bank system for real estate loan financing, whose security is the property with the sales of the bonds being the source of financing. This system constitute such institutions as Nykredit, Totalkredit, BRFkredit, Realkredit Danmark, Nordea Kredit, and others.
When applying for a loan, a bank takes into consideration various criteria:
1) Financial standing of the borrower - job perspective, financial situation, age, own contribution, savings, securities (e.g. other properties), A-kasse payments, life insurances and pension.
2) The property - the bank will check both condition and location of the house we intend to buy.
If the condition of the property is bad, the bank may also grant a loan for its renovation. Your asset in this respect could be the possibility of renovating the house yourself. It may happen, however, that the bank will refuse the loan, despite the borrower's very good financial standing, if the house's technical condition is poor, or if it is located in remote areas.
Before you start looking for a particular house, it is worth going to the bank to check your financial capacity and to learn how much you can afford.
Read also: What to pay attention to when looking for a house|What to pay attention to when looking for an apartment