Risk criteria for mortgage loans remain unchanged
There is increased attention to the profile of families due to the current situation. But the criteria remain the same.
Banks continue to lend for home purchases, but even so, there is increased attention given to household debt risks given the current situation. So far, the Covid-19 crisis has not changed the banking sector's risk criteria. Banks maintained the criteria for enforceability and the context had no impact on the offers that most had for their customers.
In practice, new applications for mortgage loans are being analyzed more carefully, but without a radical change in their credit granting policy. In fact, banks are very receptive to new loans and believe that this will be a good time for customers to try to make the terms of the loan more advantageous and thus seek to improve housing credit conditions.
However, as in all sectors, banks will be attentive to the evolution of this situation of uncertainty and their criteria can be adjusted. Their main concern is the potential impact on consumers' purchasing power, both due to a reduction in their disposable income and a possible loss of employment.
It is important to remember that the main criterion analyzed by an entity to verify whether it grants us mortgage loans is the capacity we have to pay the loan on a monthly basis. For that, they will analyze:
1. Indebtedness: group all our declared income;
2. Other income, such as rent or pension, provided it is declared and can be justified. To calculate the indebtedness, add the household income and the loan installment must represent a maximum of 35% -45%;
3. Banco de Portugal's Map of Responsibilities: request our information from Banco de Portugal to check our credit history.
The responsibilities declared by the entities fall into two groups:
- Direct responsibilities: loans, bank guarantees, leasing, credit cards.
- Indirect liabilities: when we endorse other people or entities to whom they have granted credit.
4. Percentage over appraisal: in housing loans for permanent own housing, most entities do not exceed 85% -90% of the appraised value.
5. Professional situation: the financial institution will take into account our professional path, seniority in the company, periods of professional rest, activity sector, etc.
6. Type of contract: permanent, fixed term, public official, professional, etc.
Source: idealista.pt
15 from April from 2020
Catarina MirandaAdministrative Assistent
Despite the Covid-19 crisis, the criteria remain the same
* Call to national mobile network.