Real estate agents are silent, buyers are frustrated and the public is talking about making it harder to get a loan. But what is the reality? And more importantly, what can home buyers do to improve their chances of getting approved for a loan?
Banks have really tightened their grip
Yes, access to credit has become very difficult. Banks have tightened their criteria significantly and the decision-making processes have slowed down. This is not just a perception – statistics and the banks’ own statements confirm the trend.
The reasons are partly understandable. Banks need to operate profitably, and too loose a lending policy will eventually return to everyone. As interest rates rise, the assessment of borrowers’ ability to pay becomes more critical. Banks have a responsibility both to their owners and to society as a whole.
Slow processes are unacceptable
While stricter criteria are justified, there is no reason why loan applications should take months to process. Buyers have to wait an unreasonably long time for a decision, which puts a brake on the entire housing market.
This is particularly problematic in urgent transactions where the seller is waiting for a quick decision. Banks should streamline their processes – strict criteria do not justify slow processing.
How to look at your home through the eyes of the bank
In this situation, the buyer must learn to think like a bank. The bank is not interested in your decor or your personal preferences. Instead, the bank will evaluate:
- The situation of the building society – does the company have debts or upcoming renovations?
- The attractiveness of location – how easy is it to sell your home if necessary?
- Building condition – will the building require major investment in the coming years?
- Corporate governance – is the company being run competently?
Prepare carefully before applying for a loan
Don’t leave anything to chance. Find out the situation of the property thoroughly before you apply for a loan:
- Get a landlord’s certificate and examine it carefully
- Request the latest financial statements and board minutes
- Find out about future renovations and how to finance them
- Make sure the company has no major disputes
Better results through knowledge
Getting credit has become more difficult, but that doesn’t mean that nothing can be done about it. By preparing carefully and understanding the bank’s perspective, you can significantly improve your chances of getting approved for a loan – and faster.
Remember: an independent expert analysis of the property can be the most decisive factor in convincing the bank that your investment makes sense.
