How much of the income should the mortgage loan installment be?

Credit evaluation is based on the bank's risk criteria, verifiable income, credit history and valuation of the property to be purchased. This evaluation determines whether credit will be awarded; It does not alone indicate with what living standard the household will bear the same installments over the years.

Child, health, education, transportation, non-rental housing expenses and irregular expenses should also be visible in the personal capacity calculation. Instead of borrowing up to the upper limit of the loan approval, testing whether the budget works under changing conditions provides a safer framework.

Key distinctionThe loan you can get and the loan you can comfortably pay may not be the same.

The decision is not based on the upper limit offered by the bank; It should start from the sustainable amount that the household can allocate after mandatory expenses and security margin.

First, write down the household's regular and verifiable net income. Then consider essential living expenses outside of housing, current loan and card payments, regular family responsibilities, and monthly savings goal. Spending the entire remaining amount in installments may also make the budget fragile; Allow additional allowance for maintenance and unexpected expenses.

Instead of accepting variable income such as bonuses, bonuses, rent or freelance income as full amounts, evaluate them cautiously based on their frequency of occurrence. The sustainability of the account depends on it operating in an ordinary month, not the best month.

• Regular net income and conservative variable income
• Food, transportation, education, health and family responsibilities
• Current loan, card and other regular debt payments
• Building fees, insurance, maintenance and property tax
• Emergency savings and long-term savings goal

Calculation based on a single current income figure does not reflect the uncertainties of long-term debt. In the balanced scenario, today's income and expenses are; In the cautious scenario, revenue decrease or expense increase; In a challenging scenario, consider temporary job loss or unexpected high expenses.

In each scenario, note the remaining amount after the installment is paid, how many months of expenses the emergency savings will cover, and the mandatory first year expenses of the property. The purpose of the challenging scenario is not to scare, but to foresee under what circumstances the plan will be disrupted.

A longer term can reduce the monthly installment and increase the total repayment. The offers are the same loan amount and maturity; View side by side with monthly payment, total refund, fees, insurance quotes and early payment terms.

The Department of Commerce recommends reviewing the pre-contract information sheet and comparing the total cost with different bids. Since there are conditions under which early payment compensation may be applied in fixed interest contracts, if there is a possibility of interim payment or closing in the future, read this article at the beginning of the decision.

• Monthly installment and total repayment
• Valuation, allocation and transaction expenses
• Separate conditions for insured and uninsured offers
• Early payment or restructuring terms
• Payment date and compliance with the salary flow in the budget

Even if the down payment and loan installment can be covered, title deed, moving, renovation, furniture and common area expenses may be accumulated in the same period. Having to complete these expenses with a consumer loan or card debt increases the total burden of the mortgage loan, which seems reasonable at first.

The current condition of the building to be purchased is part of the loan decision. A house that is ready for use and a house that requires plumbing, joinery or wet room renewal do not carry the same financial burden, even if they are at the same sales price.

Property and financingThe loan should only purchase the home; It shouldn't consume the rest of the budget.

If there is no margin left for renovations and unexpected expenses after the transaction, the seemingly affordable installment may not cover the real total cost of the house.