Have you decided to invest in your own home and found your dream property? Now it’s just a question of arranging the necessary financing. Whether it’s an apartment or a house, buying a property always costs a great deal of money. Few can make an investment on this scale without help. For many people a loan is the best solution. But before the bank grants you a loan, it will want to know something about you.
So how should you prepare for this all-important meeting with the bank? Which documents do you need to bring and what questions do you need answers to?
If you’re well prepared, you’re not only increasing your chances but will also get a decision all the sooner. Here are some tips on how to prepare for the interview.
Can you answer these questions?
- How much money can you contribute out of your own resources?
- What securities can you offer the bank (if you already own other properties, for example)?
- How much credit do you require (purchase price + ancillary costs + renovation costs – equity)?
- What monthly repayments can you afford (perhaps you already have other loans outstanding)?
- By what date should the mortgage be paid off (at latest upon retirement)?
- What is the value of the property?
What about your finances?
Currently there is not enough housing to satisfy demand, so market prices are correspondingly high. But at this stage, the price you pay for the property is only a secondary consideration for the bank. More important for the bank is what security is available for the loan. For this reason, the bank usually bases its lending decision on the mortgage lending value. This is the amount for which the property could most likely be sold during the whole term of the loan. How this figure is calculated depends on many factors. For example, location and size play a role, but the condition of the property is also a key factor. So ideally you should bring plans (or floor plans) and photos of the property to your meeting with the bank.
Equity is also a significant factor for the bank.
This is because: the more solvent the borrower, the lower the risk to the bank.
However, the most important thing for the bank is your monthly income – after all, this is how you will repay the loan. It is important that you keep enough for your living expenses after deducting the loan repayment. A lot can happen during the term of your property loan, so always plan for some leeway. That’s why we, as a bank, are also very careful when calculating the loan amount and repayments.
Checklist – have you thought of everything to prepare yourself for your interview with the bank?
To ensure that you are properly prepared for your first meeting, we have created a checklist that includes all the documents you should bring to your first appointment. This will save you from having to submit documents later, in which case your mortgage application could only be processed at a later attempt.
Raiffeisen is a cooperative bank, which makes all the difference. That applies to your mortgage too.
At a fixed or variable rate of interest, whatever the term, monthly repayments and government support – together we will find the right combination for you. We take your plans very seriously, therefore you will receive a quick response to your enquiry. We will be happy to advise you even outside our regular opening hours at one of our branches or we can come to your home.
Benefits of our “R-Logement” mortgages include:
- A personalised offer tailored to your needs
- Fixed or floating rates
- Advice on loan structuring, state aid, tax optimisation, insurance, etc.
- Appointments for advice also outside business hours in one of our branches or at your home
- Collecting OPERA points
Housing loan – insurances and deductible taxes
- To protect your loved ones in the event of your death, we strongly recommend that, when you take out a mortgage, you also arrange insurance on the outstanding balance which will cover the amount that remains due.
- Under the tax reform implemented in 2017, the maximum deductible contribution to a home loan savings contract (Bausparvertrag) for taxpayers who were aged under 40 at the beginning of the tax year was increased to EUR 1,344. For more details, please visit the Tax Reform Portal.
- Interest paid on a mortgage for a property used as your primary residence can be claimed against tax within the legally prescribed limits.