It would seem that there is no client more desired by the bank than a person with a very high income. After all, it is the wealthy customers who give the best hope of paying the instalments conscientiously, which is why they should theoretically have no problem with obtaining a mortgage. Nothing could be further from the truth. It turns out that large earnings are no guarantee of receiving financing for the purchase of real estate. Why? This is explained in our guide.
High wages are often even more expensive.
It is no secret that people who earn a lot spend as much as they do. It’s very easy to get used to a luxurious life. A wealthy person rather does not use public transport, buys a more expensive car, dresses in better shops, is treated privately, eats in good restaurants. All of this costs a lot.
Therefore, it is not uncommon for a person who earns a lot to be unable to put aside even a small amount of money. He simply lives at too high a standard of living and the bank knows this very well. Where did you come from? For example, by analysing your personal account. If a bank finds that a customer who has a high salary spends most of his money on consumption, it can unscrupulously reject his credit application.
All ‘guilty’ of a recommendation
This recommendation, introduced by the Polish Financial Supervision Authority, has been in force in Poland since the outbreak of the global financial crisis. The main reason for this was the uncontrolled granting of mortgage loans to people who simply could not afford to pay them off.
Banks must therefore follow recommendation T, which limits their movements and requires them to carefully analyse the real financial situation of the client. According to this recommendation, the instalment of a possible loan may not exceed 50% of the applicant’s income, or 65% if the customer earns more than the national average.
As one can easily guess, a person earning e.g. 10 thousand dollars a month, but spending 8 thousand dollars on a life, will not receive a loan with a high installment. For a bank, it is not how much a client receives from an employer that is important, but how much of this amount is actually left in his pocket after deducting fixed costs.
In conclusion, high earnings certainly do not guarantee that you will receive a mortgage. Paradoxically, a client who earns little but lives on a very modest footing may be in a better position.