Housing Loan for Foreigners?

by **dev** » Thu Jun 21, 2012 8:00 am

Hello,
Do all of the Banks require 'Permanent Residence Permit from the foreigners for the housing loan, or does any bank consider 'A' type residence permit holders as well? I talked with OP, and they said I've to arrange my 'backup/gaurantee money'(Sorry, don't remember these terms), which is not easy for me at the moment.

**Sponsor:**

by **Rip** » Thu Jun 21, 2012 8:17 am

You better ask offers from several banks anyway. I don't know personally really, as our A permit holder was only one of the two co-signers.

What exactly is your situation anyway? Is the problem that your a non-permanent resident, or that combined with asking a large loan compared to the house value? How much of the purchasing price you can pay yourself?

by **dev** » Thu Jun 21, 2012 8:40 am

Thanks Rip. Actually I talked with Nordea as well, and they wanted the 'Permanent Residence Permit' as well, which I suppose is 'P' type.
I don't really know the loan terms and how it works. What I could understand was that when a citizen or permanent resident applies for loan, the government ( or may be the bank itself ?) gives some kind of backup so the person does not need to show any kind of backup money. Bank said they can give loan, but I have to arrange the backup money (IIRC~~ 30%), which I don't have at the moment. So I was wondering if there's still any possiblity.

by **Upphew** » Thu Jun 21, 2012 9:24 am

dev wrote:Thanks Rip. Actually I talked with Nordea as well, and they wanted the 'Permanent Residence Permit' as well, which I suppose is 'P' type.
I don't really know the loan terms and how it works. What I could understand was that when a citizen or permanent resident applies for loan, the government ( or may be the bank itself ?) gives some kind of backup so the person does not need to show any kind of backup money. Bank said they can give loan, but I have to arrange the backup money (IIRC~~ 30%), which I don't have at the moment. So I was wondering if there's still any possiblity.

http://www.statetreasury.fi/Public/defa ... deid=19257
http://www.statetreasury.fi/Public/defa ... deid=19258

Sure there is possibility, you just need to show guarantor or assets to back up your loan.

by **Rip** » Thu Jun 21, 2012 10:01 am

That the house itself is considered enough to guarantee about 70% of the purchase price is standard practice here. The supplied link is for state guarantee that helps further (but not to 100% of the purchase price, 85% if I understood it right for non-ASP loans). Some of the banks have offered possibility to wave additional guarantees for a fee, but that varies based on bank, economic situation and how much credit risk they think you are (the residence permit status could I guess affect the latter, though I do not know how much it does)

One bank that I've seen currently advertising 100% housing loans:
https://www.saastopankki.fi/nooa/web/4681/76

by **dev** » Thu Jun 21, 2012 10:08 am

Upphew wrote:Sure there is possibility, you just need to show guarantor or assets to back up your loan.

I guess I should forget the whole idea then.
I remember, one of my friend in Sweden (foreigner, working) got the loan there, but looks like its different here.

by **Upphew** » Thu Jun 21, 2012 10:21 am

dev wrote:I remember, one of my friend in Sweden (foreigner, working) got the loan there, but looks like its different here.

I know that people have gotten more loan than the house is worth, in USA. We had that kind of reckless loan practices before. Lesson learned. http://en.wikipedia.org/wiki/Finnish_ba ... s_of_1990s

by **dev** » Thu Jun 21, 2012 10:45 am

Just to make sure, as I'm not permanent residence or citizen, I'd need to either show that I have ~30% of the loan amount, Or have the guarantor or assets. All other options (eg. wave additional guarantees for a fee) are only for the citizens and Permanent residents.

by **Mook** » Thu Jun 21, 2012 10:56 am

dev wrote:Just to make sure, as I'm not permanent residence or citizen, I'd need to either show that I have ~30% of the loan amount, Or have the guarantor or assets. All other options (eg. wave additional guarantees for a fee) are only for the citizens and Permanent residents.

It's nothing todo with showing that you have 30%. You have to pay 30% of the purchase price when you buy the house. The other 70% is a loan. The property is then used as guarantee for the loan - the bank keeps all the papers. So, if you don't pay the mortgage, the bank sells the property.

I've never been asked about my resisdence status when applying for SPAM SPAM SPAM SPAM - maybe you would be better not raising the subject...

by **Rip** » Thu Jun 21, 2012 10:58 am

dev wrote:All other options (eg. wave additional guarantees for a fee) are only for the citizens and Permanent residents.

I have not seen such statement made. It might well be that Nordea or (that branch of) OP would not give you the loan on those terms even if you were a permanent resident or citizen (economic situation is precarious you can hardly take it for guaranteed that housing prices will continue going up). Nordea is advertising (also in English language) their OmaTakaus/OwnGuarantee where for fee you can get loan up to 95% of the house price. If you have that 5% available you could specifically ask if you are eligible.
http://www.nordea.fi/Personal+customers ... 07312.html

Other option are the "säästöpankit", they at least currently advertise 100% loans.

by **Rip** » Thu Jun 21, 2012 11:29 am

Mook wrote:It's nothing todo with showing that you have 30%.

Actually it does. Just "showing" of course isn't enough because the bank also wants to hold also that property in their custody until the loan is paid, so it would not make any sense to give bank notes as guarantee. Shares in a financially solid company or shares in housing company (for another apartment) would be accepted (at bank discretion) for some fraction of their market value. Finnish government bonds would presumably be accepted at face value.

(Obviously OP does not have this option)

by **Mook** » Thu Jun 21, 2012 2:13 pm

Rip wrote:
Mook wrote:It's nothing todo with showing that you have 30%.

Actually it does. Just "showing" of course isn't enough because the bank also wants to hold also that property in their custody until the loan is paid, so it would not make any sense to give bank notes as guarantee. Shares in a financially solid company or shares in housing company (for another apartment) would be accepted (at bank discretion) for some fraction of their market value. Finnish government bonds would presumably be accepted at face value.

(Obviously OP does not have this option)

Your reading skills are clearly poor.

You don't give the 30% to the bank, you give it to the seller of the property - when you buy it!

by **Rip** » Thu Jun 21, 2012 2:50 pm

Mook wrote:Your reading skills are clearly poor.

Well, ok

dev wrote:I'd need to either show that I have ~30% of the loan amount, Or have the guarantor or assets

- that sentence isn't OK (and I could have noted that), as it should have been 30% of the purchase price or guarantor or assets.

But then other hand is your comment really better

Mook wrote:You don't give the 30% to the bank, you give it to the seller of the property - when you buy it!

...as I was clearly talking about giving assets to the bank as a collateral?

As such, technically cash I guess could be collateral too (extremely liquid, value well defined), but as you would effectively pay unnecessarily commission and interest for that 30% you would immediately deposit (with zero interest rate) at the bank, the bank manager might start wondering if the person suggesting this is sane enough to sign any documents.

by **Mook** » Thu Jun 21, 2012 11:13 pm

Rip wrote:
Mook wrote:You don't give the 30% to the bank, you give it to the seller of the property - when you buy it!

...as I was clearly talking about giving assets to the bank as a collateral?

As such, technically cash I guess could be collateral too (extremely liquid, value well defined), but as you would effectively pay unnecessarily commission and interest for that 30% you would immediately deposit (with zero interest rate) at the bank, the bank manager might start wondering if the person suggesting this is sane enough to sign any documents.

Sounds a bit like:

The property is then used as guarantee for the loan - the bank keeps all the papers. So, if you don't pay the mortgage, the bank sells the property.

Interestingly, I once had a home loan but didn't own an home - then the home loan was guaranteed with cash..

by **dev** » Fri Jun 22, 2012 10:20 am

Sorry, I should have used better word having than showing. So I guess, my question was if I can get the loan up to 95% of the house price, as Rip suggested, I'll check Säästöpankit and Nordea and also Sampo.

Here's what OP said:

It is not possible to give OP guarantee, so we have to use Finnish government guarantee.

And i think thats not upto 95%.