Credit calculator for the mortgage
Mortgage Loan Calculator – What is it?
Calculating your creditworthiness for a mortgage is not easy. Banks take into account a lot of premises that affect the granting of a loan or the rejection of an application. Tools such as loan calculators allow you to simulate creditworthiness in a short time. All you have to do is enter your monthly income, loan amount, loan period, interest rate, commission, other fixed liabilities, as well as installments (equal or decreasing) to see what our creditworthiness looks like after a while. The results will show the maximum amount of mortgage that financial institutions can offer. Below are the offers of specific banks with information on interest rates, APRC, commission, installment amount and total repayment amount. These results can be sorted in terms of the most important value for the borrower.
How does the mortgage calculator work?
The loan calculator analyzes the entered data in a similar way as experts at banks. This is, of course, only a simulation, because the advisers take into account other factors, e.g. Retro or credit scoring (bank scoring). The calculator mainly helps to predict how much mortgage you can get, which is helpful in income data, monthly obligations or the number of people in the household. By using such creditworthiness calculators, the future borrower learns not only what maximum amount he will be able to take in the bank, but also which financial institutions offer him the most favorable offers tailored to his capabilities.
How do you compare mortgage offers?
The mortgage calculator not only presents the best offers, but also allows you to compare them. The borrower may consider bank proposals, taking into account interest rate, APRC, commission or total amount to be repaid. An especially important parameter is the interest rate, which consists of the 3M Euridor element and the bank’s margin. The selected type of installments is also important. Banks offer equal and decreasing installments. The first ones throughout the repayment period will be the same. The second ones will decrease over time. However, it is worth being aware that at the beginning the amounts will be really high. When looking for a mortgage, you should also find out the amount of your own contribution. Most often it is about 20% of the loan value.
What is credit standing?
Creditworthiness is nothing more than an assessment of financial credibility. Banks must check that the person applying for the loan will be able to pay it back together with interest. Typically, this analysis is based on an assessment of the documentation and information provided by the potential borrower. In addition, banks also use other credit assessment methods that are usually not disclosed by financial institutions.
How to increase your credit standing?
Many people wonder how to get a mortgage, and it has a huge impact to increase creditworthiness. There are several ways to improve it. The form of employment of a potential borrower is very important for the bank. People with an employment contract have the best chances of getting a loan. Other options (e.g. contract for a specific task or self-employment) give banks less certainty about timely repayment of installments, so when planning a loan well in advance, you should think about having an employment contract.
Commitments are another important issue. Their absence obviously increases the chances of getting a loan. If the potential borrower repays several loans, it is worth consolidating them. Then the installment will be smaller, thanks to which the credit standing will increase slightly. It is also good to sort out all bank accounts. It is better to give up credit and personal cards that have a limit on your account. They signal to the bank that new loans may be taken at any time.
The credit history, which is described in Retro, is also important for the bank. If any obligations were not paid on time, it had to be recorded in the Credit Information Bureau, which reduces the creditworthiness. However, Retro is not only bad information. This institution also collects data on the timely repayment of loans, which positively affects the granting of credit, because it increases the credibility of the person seeking money.
A loan taken not alone, but with parents, a partner / sibling or siblings, can also improve creditworthiness. Higher common income means greater creditworthiness and better security for the bank.
The choice of installment type is also important. Although decreasing installments are very tempting, they do not affect the assessment of creditworthiness. Why? Because initial installments are considered, which are very high and reduce creditworthiness. Equal installments are therefore a safer choice.
The own contribution is also important for the bank. Usually 20% of the loan value is required, but the higher the amount you pay at the beginning, the less you have to pay back, which also has a better impact on your creditworthiness.
Mortgage – what to watch out for?
The seemingly cheapest mortgage will not always be the case. For this reason, you should carefully look at the contracts and read them carefully. Banks may have a number of additional collateral and fees that the loan calculator will not show. It is worth checking, for example, if you receive reminder reminders to pay back when the borrower defaults on time. It also happens that early repayment of the entire loan may be payable. When signing a contract at a bank, you should ask for such details to decide on an offer that is favorable for you.