Among other things, together with the loan request, the semi-annual current account statement is presented to the bank. In addition to the payment behavior, on the basis of this the bank evaluates the regularity of the income and wants to make sure whether the person requesting a loan has passed the probationary period. But how to behave in a situation where a very short period of time separates the loan applicant from his dream home, explains Tanel Rebane, Personal Banking manager at Luminor.
The semi-annual statement provides the bank with an overview of the customer’s financial behavior, income and existing obligations. It usually also reflects whether the loan applicant has passed the probationary period or not. “If after the fourth month a fifth income comes in from the same employer, it can be assumed that the probationary period has been successfully passed and that the person’s income continues with the same regularity,” says Rebane.
Since according to the law the maximum duration of the probationary period is four months, the loan application could wait until the loan applicant feels secure about the job. “Before taking out a loan, every person needs to feel that where they are at this point in their life is secure enough and will also help them service their home loan in the future,” Rebane points out.
Therefore, passing the probationary period is also a prerequisite for obtaining a home loan, on which the bank does not compromise. However, there are exceptions due to the specific nature of the workplace. “There are jobs where turnover is inevitable and where income can come from different sources. Therefore the bank looks at each client’s profile separately and then makes a decision,” he says.
The exceptions prove the rule
If a person has their dream home on the horizon, but there are still a few weeks left until the end of the trial period, that doesn’t automatically mean a red flag, according to Rebas. “Inevitably there will be situations where you will need to act quickly to find a suitable home. We generally recommend waiting for this decision, but as you know foreclosure on your found property can happen very quickly,” he adds.
In such a situation, the head of private banking recommends contacting a credit advisor and consulting on how to proceed. “If the client is sure that after the probationary period he will be able to continue to hold the same job position, the bank wants written confirmation from the employer demonstrating this.”
Sometimes an exception is made for the best specialists or for a person whose income in a new job position is higher than the previous one. “The bank above all wants to see and make sure that the person has a secure job and the ability to service the loan – as every client is different, it is worth discussing with the advisor what the possibilities are for receiving a positive loan application,” he says Rebane.
2024-01-06 13:58:28
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