The number of children in the family affects the creditworthiness, but also the level of payments in the “Flat for the Young” program. Their amount can be up to 20% of the value of the property, provided that the third child is born within 5 years of purchasing the property in MdM.
Creditworthiness and children
Large families applying for a loan must undergo the same credit procedure as singles or marriages with one child. And the most important element of this process is of course having parents’ creditworthiness, which is influenced by, among others income level, as well as the number of dependent children, as banks calculate the creditworthiness taking into account the number of persons in a household. Depending on the number of people, different household maintenance costs are assumed. In the case of a single family, living costs of 1000-1400 USD per month are assumed. Each additional person in the household is between 600 and 1000 dollars per month. This means that in the case of a marriage with one child, the minimum living costs are from 2,400 to even 4,000 thousand dollars.
Thus, the number of children in the family has an impact on creditworthiness, but this impact depends primarily on the amount of earnings. In the case of high income (above $ 10,000 a month), it usually does not matter if there are 1 or 3 children in the family, because at this level of income the creditworthiness is limited by the ratio of the loan installment to the net income. As a rule, it is 40 to 50 percent of net income, so even a 3rd or 4th child will not reduce your creditworthiness. The number of people in the family has a greater impact on creditworthiness at lower incomes. For example, a couple who earn 5,000 net monthly and have no children can apply for an average loan of 480,000. However, with the same income, but with 2 dependent children, a possible loan is around 380,000. Each subsequent person is a loan lower by approximately $ 30,000.
10, 15 and even 20 percent
The number of children affects the amount of subsidies in the “Flat for the Young” program, and the more they are, the higher the government’s support. And so, childless marriages can apply for a 10% extra payment, but if there is at least one dependent child in the family, the amount increases to 15%. However, the surcharge can be as much as 20%, but only if the third or subsequent child is born within 5 years of purchasing the property in MdM.
When applying for the “Apartment for the Young” loan, it is worth paying attention to a few elements and planning a loan with government support in a timely manner. Let’s start with the film. If there are two children at the time of application, the maximum area is 75 square meters, and for a house 100 square meters. If a third child is born before submitting the application, the area limits are raised by 10 m2, to 85 and 110 square meters, respectively. From this point of view, it is worth waiting with the submission of your application until the birth of your third child.
It is different in the case of subsidies, because it is better if the third child is born after buying the property. A family with two or three children will receive an additional payment of 15% of the property value “at the start”. But when the third or subsequent child is born within 5 years after buying the property, the total sum of the subsidy will be 20%. Thus, in a situation where a marriage with two children applies for a loan now and the third child is born after buying an apartment, then the total amount of the payment will be 20% (15% now + 5% after the birth of the third child). However, if a third child is born before submitting the application, the additional payment will be only 15%, and possibly an additional 5% will be paid after the birth of the next child.
The family is building a house
The situation is slightly different when instead of buying a flat or a house from the developer, the family decides to build the house on their own. After fulfilling certain criteria, it will be possible to recover some of the VAT paid on some construction materials. In this case, however, the home space limits are also limited. If at the time of issuing the building permit there will be 2 children, the usable floor space may not be larger than 100 m2, and if there are 3 dependent children then 110 square meters.