This video provides an introductory overview of calculating borrowing capacity (creditworthiness), stressing that this metric determines the maximum loan amount accessible. It contrasts the two methods available: rapid, highly approximate online simulations, and the necessary, but slower, process of obtaining reliable figures directly from banks. A core piece of rational advice is highlighted: due to significant variance in calculations between institutions, applicants must consult multiple banks. The demonstration uses an online calculator to illustrate how strategic framing—specifically cancelling existing rent payments if the new property is designated as a primary residence—can artificially inflate calculated capacity, optimizing the initial loan file presentation.
Summary of Calculating Borrowing Capacity
0:08 Defining Capacity: Borrowing capacity determines the maximum amount you can borrow, calculated fundamentally based on your income (salary, bonuses, other monthly income) and expenses.
Online Simulation (0:36): Fastest method, providing an "approximate simulation." The drawback (1:17) is that it is "very approximate" and "much less reliable." I don't care about the speed if the results are useless, as they often are.
Direct Bank Consultation (1:34): Slower (waiting for appointments and document submission) but yields a much more precise and reliable capacity estimate, forming the necessary foundation for the loan process (7:34).
2:17 Consult Multiple Banks (Key Takeaway): Due to differing internal calculations between banks, simulations can show differences of €10,000 to €20,000. It is inefficient and foolish to limit yourself to only one institution.
2:45 Preparing the File: Start familiarizing yourself with banking terminology (e.g., 110% financing, deferral) early so you can present a prepared file and counter objections effectively (3:08).
4:25 Impact of Rent (Optimization Tactic): When using the online simulation (demonstrated on empruntis.com), if the new acquisition is intended as a primary residence (PPR), the existing monthly rent expense can be "canceled" for the purpose of the loan calculation (4:36).
Takeaway: This cancellation significantly increases borrowing capacity (e.g., 5:52 vs. 6:33), making it an effective, if slightly manipulative, tactic for optimizing the perceived strength of the applicant's file, especially for first-time rental investors.
6:56 Reality Check on Reliability: The speaker admits that online simulations are highly inaccurate, noting cases where the estimate was €130,000, but a bank offered €150,000 (albeit at a higher rate). As far as I can tell, the online tool is mostly useful for generating an initial scale, not a concrete figure.
7:24 Final Advice: While online tools are quick for an estimate, getting the formal, reliable figure directly from multiple banks remains the "foundation" and the most important step.