Mortgage for people in debt

When an application for a loan to buy a property is submitted, the applicant's creditworthiness is checked. Is it possible to obtain a mortgage for people in debt? Find out more about getting help from a bank in such a situation.

The applicant's debt and credit history

Banks distinguish several types of debt. The term covers not only unpaid amounts owed to housing cooperatives or banks, but also late repayments of debts to non-bank lenders, unpaid contributions to ZUS (the Social Insurance Institution) or the tax office, and maintenance arrears. Most often, however, people apply for a mortgage while in debt when they have problems repaying several banking products, such as cash loans, revolving loans, personal loans and credit cards. Contrary to appearances, support previously obtained from a banking institution does not negatively affect the decision to grant a mortgage for buying a property.

Analysis of the application is the key point for correctly calculating creditworthiness. Institutions look at the applicant's creditworthiness and verify the history of repayment of existing financial obligations. Whether an application for a mortgage from an indebted person is approved depends on factors such as: source of income, age, marital status, the number of people the client supports, data from the specific lending period, the type of instalments being repaid and other financial obligations. Information on these matters is collected by BIK, BIG, KRD and the National Register (Krajowy Rejestr).

Can I get a mortgage if I am listed in the BIK database?

An entry in the database of the Credit Information Bureau does not automatically cause a loan application to be rejected. If the arrears were small, the bank may accept the request. Some institutions grant a mortgage to people in debt on individual terms. This may involve a higher interest rate or the need to find a co-borrower. This is how the bank protects itself against the increased risk of problems. Before submitting documents, it is worth checking that your data has been removed from the BIK database and making sure you have a positive credit history. Even if you currently have various financial obligations but keep up with their repayment, you may still be granted a mortgage.

BIK HISTORY AND APPLYING FOR A MORTGAGE – FIND OUT MORE

When will a mortgage application from a person in debt be rejected?

Problems with being granted a mortgage arise when the applicant has trouble repaying previously agreed loans and credits. The source of income is a major obstacle where we do not have an appropriate contract. A refusal often occurs in the case of enforcement or debt-collection proceedings. The most common reason for a refusal decision is that the confirmed income is insufficient in relation to financial obligations.

If you have more questions about obtaining a mortgage or need help in properly preparing your documents, contact the representatives of REMAX Gold and get detailed information.