How much credit can a couple with an income of 2,000 euros get?, KNEWS

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by Andreas Kokkinos

Home loans are an issue that inevitably affects many young couples. As house prices have skyrocketed while wages have stagnated, the need for housing is driving borrowing. Borrowing money is almost a necessity for most young couples who cannot afford to buy an apartment or house without credit. But how much money can you get? How does the bank know that you are repaying the loan? How are the rates determined? Besides your income, what other factors does the bank take into account?

The process

The procedure section contains the client’s financial information in paper form, such as the amount requested, his net salary – total for couples – and his living expenses. There are also social security contributions and property tax. According to Central Bank guidelines and how to calculate net income, a married couple has monthly living expenses of about EUR 1120, followed by EUR 220 for each child under the age of 15 and EUR 370 for each child between the ages of 15 and 18. Banks can charge a percentage of Add 10-20% to the amount set by the central bank as a ‘buoy’ for living expenses. It should also be noted that if the amount declared by the potential borrower for living expenses exceeds 1120 euros, the bank will automatically take this amount into account.

It is estimated that a married couple has monthly living expenses of around EUR 1120, and then an amount of EUR 220 is added for each child up to the age of 15 and EUR 370 for each child aged 15-18.

Candidates are tested

After the financial data has been transmitted, the bank checks the potential borrower. In other words, a bank teller compares each customer’s identity number with the ARTEMIS system to identify any credit facilities he or she may have with other banks. Loans from other banks are taken into account for the check, as are any arrears and whether the applicant is a guarantor of another loan. Overdrafts and credit cards are also examined.

How the rate is calculated

Then the couple’s salaries are added together (e.g. 1000 + 1000 euros) and the cost of living and credit facilities are subtracted from the total as indicated above. It is estimated that approximately 80% of the amount resulting from the deduction can be used as a monthly installment. This means that after deducting 1,120 (as living expenses) and 280 (as credit facilities) from €2,000, an amount of almost €600 remains. The couple can then afford an installment of around 480 euros. According to banking circles, the institutes also carry out some “stress scenarios”, i.e. contingencies that can put a strain on the candidate’s financial situation. Examples are a 15 percent increase in the rate or a 20 percent cut in income and wages, but there are many others. If the DSR (Depth Service Amount), calculated by dividing the rate by the excess number, exceeds 80%, the prospective loaner is automatically rejected by law.

Can a couple with 2,000 income take out a 200,000 loan?

In these cases, it is particularly important that the bank takes into account both the level of education (depending on the degree, master’s degree, whether directly usable for job search in the case of unemployment, opportunities) as well as the style or your preference for the stability of the job. A person working in the public sector (government) has an advantage due to stability, while lawyers and accountants in banking institutions provide “security”. Candidates whose income is based on commissions, on the other hand, are considered risky.

In summary, the monthly rate for a couple who wants to buy a house or apartment with a loan of €200,000 is around €700, with a maximum repayment period of 35 years. This assumes that the borrower does not reach the age of 65 during the 35-year term, as this is the maximum age for life insurance. To go back to the baseline scenario, a young couple with an income of €2,000, no children and no other payments or outstanding payments can get a loan of up to €200,000, although it is particularly helpful that most banks can do the math Rate online according to the amount borrowed using a calculator on their websites. Finally, it was found that the majority of loans are between $150,000 and $200,000, with nearly 80% of applicants being approved.

[This article was translated from its Greek original]

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