Mortgages can be difficult to obtain even after quarantine: bank customers have shared experiences

Residents are asking about handling the contract in case of divorce

According to Steponas Jurelė, head of the bank rate comparison platform Bankai.lt, according to questions asked by residents on the platform, the total mass of people interested in home loans has definitely decreased. “We do not have statistics on the exact number of requests to banks, but it is remarkable,” says the interviewee.

S. Jurelė states that he notices an interesting trend that the number of questions about divorce has increased significantly: “People are interested in how existing or future mortgage agreements will be handled if families divorce, as well as unmarried couples who They want a mortgage because they are thinking about divorce and are interested. what will happen to the real estate you buy after the divorce. I don’t know if it is a consequence of quarantine or just a coincidence. “

Commenting on the situation with respect to bank financing after quarantine, the interlocutor distinguishes two groups of the population: those with higher incomes with an adequate credit history and those with lower income and debts.

“I think those who earn higher incomes and have a ‘clean’ credit history have no more trouble getting home loans and their banks are holding out their hands, but there is also stagnation and declining interest in this group: the Mortgage interest rates are growing less. ” but they are growing, “says the head of Bankai.lt.

Who to get a mortgage loan: the hardest thing

However, the other case is with those with lower incomes or who have had debts with a poorer credit history. According to S. Jurelė, the desire of this group of people to acquire real estate is the highest, but it is evident that banks offer worse conditions and request a greater initial contribution due to a higher natural risk or refuse to issue loans.

“The biggest problem and deterioration of conditions is felt when the family’s income comes from non-standard sources, with reserves or debts in the past, the income is unstable, the job has been lost, etc., and the field of work. Of course, the property to be purchased is also considered, depending on the type of property, the conditions may also change or the initial contribution may increase, “says the head of Bankai.lt.

S. Jurelė also mentioned that it is extremely difficult for people working and living abroad to obtain housing loans in Lithuania from banks, banks avoid granting them, but, according to him, the alternative is credit unions.

Average home loan spreads: 2.4 percent.

According to data provided by visitors to Bankai.lt, people with a good credit history and high income, SEB and Swedbank can expect to receive 1.9 percent preliminaries. up to 2.3 percent. mortgage loan margin, the other two banks would be Luminor and Citadele in terms of terms and margins, followed by Šiaulių bankas and Medicinos bankas.

“It is important to remember that each mortgage loan issuance case is individual and banks have quite different rating systems, some banks may not grant mortgages, others may provide it. Some banks will have the same conditions for the same family, and others will have different conditions.

The easiest way to assess and count margin sizes is when the credit history is ideal and the income is high, so the leaders in favor of the loan terms are clear. As we can see in the statistics of the Bank of Lithuania, in May the average mortgage margins were 2.4%, and the real interest rate will depend on the evaluation of each family, ”says the head of Bankai.lt.

Anonymous bank customer experiences.

The manager of Bankai.lt S. Jurelė presented several experiences of banks shared anonymously by banks. These people received mortgage loans in April-June of this year.

A person who lives alone and earns around 2,500 euros a month bought a house for more than 100,000. Eur received a 1.99 percent mortgage loan. Interest in Swedbank. His experience looks like this:

Swedbank requested about 17.4 percent. Initial Contribution Interest: 1.99 percent. + 6 months EURIBOR (average interest rates of the European interbank market at which banks are willing to lend money in euros to other banks – Delphi) Credit repayment method: 25 years. annuity.

Luminor asked for 20 percent. Initial contribution Interest – 2.24 percent. + 6 months EURIBOR. Credit repayment method: 20 years. annuity or 23 m. linear.

SEB Bank requested 15 percent. Initial contribution Interest – 2.2 percent. + 12 months EURIBOR. Credit repayment method: 25 years. annuity.

“SEB does not make an offer remotely, it is mandatory to go to the department. Early repayment everywhere is free at any time, in SEB bankas, only while EURIBOR, less, otherwise, only during the conversion of interest, i. and. once a year, “said the resident who received the mortgage anonymously.

A family of 2 people, earning around 1200 euros a month, bought a house for 50 thousand. Eur received a mortgage loan with 2.35 percent. interest in SEB bank. His experience looks like this:

Luminor Bank spoke about 2.52 percent. (Interest – Delphi) and Swedbank because the wife was 2 weeks old due to quarantine. downtime, he wanted to wait another month for his wife to receive full payment. “

A family of 2 people, earning around 2,300 euros a month, bought a house for 100,000. Eur, received a mortgage loan with 2 percent. Interest in Citadele Bank. His experience looks like this:

Swedbank’s interest rate is 2.39%, Luminor’s interest rate is 2.5%. SEB Bank did not present an offer, it reported that the minimum interest rate would be 2.2 percent.

Recent bank details

SEB and Swedbank have already counted and shared the results of the first half of this year. During the first half of this year, SEB Bank made home loans of almost 165 million. Eur, during the same period last year, for almost 180 million. EUR. This means that in the first half of the year, due to the impact of the coronavirus on the economic situation of the population, the number of homes issued is 7.6 percent. less than in the same period a year ago.

At that time, the total value of home loans made to Swedbank in the first half of this year was 19%. less than in the same period last year.

The average amount of a home loan for Swedbank this year is 73 thousand. Eur – 10 percent. more than in the same period last year, i. and. EUR 66 thousand.

The same average loan amount (66,000 euros) is in SEB Bank in the first half of this year.

According to SEB bankas data, the distribution of housing loans (for home purchase, construction, reconstruction) by region in the main cities in the first half of this year looks like this: Vilnius County – 50%, Kaunas County – 22%, Klaipėda County – 8%.

Swedbank has calculated that the average duration of a mortgage loan is 26 years. During the same period last year, it was a shorter year: 25 years.

Swedbank: The usual number of new home loan applications has been reached

According to Swedbank spokesman Saulius Abraškevičius, both before and during the quarantine period and after quarantine, each client’s request and situation are assessed individually.

“It is natural that after the quarantine went into effect in the country in early spring and there was a lot of uncertainty about the development of the pandemic, the population reassessed its ability to make long-term financial commitments.”

This was also reflected in the flow of new applications for home financing, which had been halved for Swedbank compared to the period prior to quarantine. Consequently, the number of decisions to grant housing loans has decreased, ”says S. Abraškevičius.

Comparing the values ​​of the mortgage loans granted, in March of this year Swedbank granted home loans for LTL 45 million. 63 million euros in the same period a year ago. euros This means that the difference is 28%. According to the bank representative, there was a similar difference in April of this year compared to 2019. in April, – 30%. Less.

“The commitment to new long-term financial commitments must be seen in the broader context of personal finance management. If a person or family’s income is significantly reduced or no income is received for some time, it is clear that additional financial obligations would only aggravate the financial situation. So the natural question arose: isn’t it worth waiting for the income stream to stabilize again and the loan installments do not cause financial stress? “says the representative of the Bank.

According to him, during the two months of quarantine, the situation changed in an extremely dynamic way. If at first there was a desire from the population to stop, to self-assess their income, perhaps to request a deferment of loan payments, then loan applications are now returning again, and Swedbank receives very few requests to defer payments. S. Abraškevičius notes that the usual number of new home loan applications was reached again in early May.

“The bank follows responsible lending regulations, which stipulate that the initial contribution of own funds must be at least 15%. The value of the home purchased. According to data from the first quarter of this year, the average initial contribution to Swedbank’s equity was 21% ”, says the interviewee.

According to SEB Bank, when a person borrows for the family’s first and main house, the participation is usually 15%. transaction values ​​In cases where the client borrows for non-primary and non-primary dwellings or when requesting loans for the construction of a house, the initial contribution is greater than 15%.

Banco SEB: the requirements for mortgage loans have not changed

Sonata Gutauskaitė-Bubnelienė, director of retail banking at SEB Baltic, says the mortgage market is already returning to normal levels. According to her, in June the volume of mortgage loans returned to the pre-quarantine level and in June the bank allegedly issued practically the same number of mortgage loans as last year. It also notes that the overall half-year result was primarily due to the prevailing uncertainty at the beginning of the quarantine and the decline in mortgage demand at the beginning of the quarantine.

“In March and April, both the number of loan applications and the issuance of new loans decreased by approximately a third compared to last year.

However, the number of housing applications returned to the pre-quarantine level in May. As the granting of a mortgage loan is a longer process, this number of inquiries, which have returned to the normal level, is reflected in the statistics of mortgage loans issued in June ”, comments Sonata Gutauskaitė-Bubnelienė.

According to the bank representative, the requirements for obtaining a mortgage loan have not changed recently. Like other banks, it argues that when making home loans, each client’s individual situation is always carefully analyzed.

“As always, the sustainability of clients’ income is evaluated: whether they will be able to fulfill their financial obligations adequately and on time. Even in families affected by quarantine, the situation is different, therefore, when granting Home loans, we carefully analyze the individual situation of each client, ”says S. Gutauskaitė-Bubnelienė, but does not detail who is currently more difficult to obtain a loan than before.

According to her, the interest rate and other conditions to grant credit are determined by the amount of the credit, the maturity, the evaluation of the client’s financial capabilities, the individual credit risk, as well as the situation of the credit market, the current conditions of the financial market and bank financing costs. in the international capital market.

SEB reserved 1.5 thousand. loan payments

Since the start of the quarantine, SEB Bank has made decisions about the restructuring of nearly 1,500 home loans to private clients. This means that both residents have postponed the payment of monthly mortgage loan installments.

“We received the greatest interest in the possibility of deferring loan repayments in March and early April, after which the number of loan deferment requests gradually decreased and we now receive them less and less. We note that clients who have Deferred loans for a period of 3 months do not continue to do so and begin to pay loan installments as usual.

Although we are receiving fewer and fewer requests to defer loans, we have extended the temporary moratorium on credit obligations, when loans can be deferred for a maximum period, until September 30 of this year to help individuals and companies recover their as fast as possible, ”said a representative from SEB bank.

Luminor: It’s harder for crisis-hit jobs and professions to get a loan

Regina Ungulaitienė, director of the Luminor Bank Private Client Financing Group in Lithuania, when evaluating the loan portfolio, it can be seen that despite the coronavirus crisis, it increased: in June this year, the bank had granted 18 .5% of all loans. more than at the same time last year. Last year, more consumer loans were issued, and this year – home loans.

“After the end of quarantine and the gradual return of life, we are already seeing an improvement in consumer sentiment, which is also reflected in the mortgage market. We are currently receiving as many requests for housing from clients as before the COVID pandemic. -19.

For example, in January-March we had 26% of loan requests for a house, 74% for an apartment, and 24% in April-June. home and 76 percent. Butui In June this year, the bank issued mortgage loans even more than in the same period last year. This shows that we are returning to the cyclicality and seasonality that it was before ”, comments R. Ungulaitienė.

A Luminor spokeswoman notes that the unprecedented pandemic of COVID-19 changed everyone’s behavior and forced them to rethink their financial capabilities: “After the introduction of the quarantine, we had two groups of clients: those who wanted to obtain a mortgage, sign credit agreements and to complete the acquisition transactions, and those who have decided to wait to make sure that their income stream will not decrease or will still be enough to pay the future loan. We also have customers who are still waiting for a clearer direction in house prices and are in no rush to buy a new home.

According to R. Ungulaitienė, jobs and professions severely affected by the “pandemic crisis”, whose earnings have not been recovered before quarantine due to downtime or long inability to work, find it more difficult to obtain a loan in all credit institutions.

“It is worth noting that such clients carefully assess their financial capabilities and seek advice from the bank’s specialists on their capabilities. I should point out that, in terms of revenue assessment, this criterion has returned to its previous level before quarantine.

Before making the decision to extend credit to clients, the ability of the borrower to repay the loan and pay all related payments is fully evaluated, and it is equally important to properly evaluate the real estate to be purchased, ”she says.