Applying for a Loan to Purchase a Home or Flat

Purchasing a home or flat can be one of the most memorable experiences in one’s life. It signals permanency, stability and for many it has been considered a virtual “rite of passage” into adulthood. As very few of us have the bags of cash or a healthy enough bank account to purchase a property outright, the vast majority of home buyers will apply for a loan. Nonetheless, securing for a home loan can be tricky business and it is important to review some of the most common questions that a lender will ask.

Do you represent a financial risk?

This is the most obvious question, and the one that causes many of us to cringe. Lenders are very hesitant to give a loan to an individual with a poor credit rating. Indeed, it seems as if they have learned much from the housing crisis of 2007. It is important for you as the borrower to first obtain a credit score to determine whether or not you even qualify before going any further.


This often times misunderstood term can be explained quite simply. In the case of a home loan, the lender wants to ascertain whether or not the property you are buying is worth enough to cover the loan you are requesting. This is important because with these type of secure loans, the lending institution has the ability to seize the property to pay off an outstanding debt.

Existing Assets

You will also need to be transparent with any existing assets you may have. These can include additional properties, trust funds, vehicles and bank account balances amongst other things. Also known as one’s net worth, these assets can also be claimed by the lender should you default on a loan.

Details of Your Personal Accountant

Loan companies may also wish to speak with your accountant to discuss your loan request as well as your financial situation. Should your accountant report that you are in good standing, the institution will be much more inclined to approve the loan.

These are a few of the more frequently asked questions you can expect to encounter when applying for a loan to purchase a home or apartment. By presenting transparent and accurate information, the process can be relatively painless and you may very well be able to purchase that property you have been waiting for.