Many Hungarians work abroad, most of them in Austria, Germany and England. Not everyone plans to stay abroad permanently, so they would like to buy real estate in Hungary. The home loan is also available to those working abroad. Foreign income is not an excuse, only stricter conditions than for a Hungarian citizen working in Hungary, and the range of lending banks is narrower.
Home Loans for Workers Abroad – Those with a foreign income can obtain a home loan on the following prerequisites:
Address cards-tax card
The most important condition is the existence of a Hungarian address card and a Hungarian tax card. These are the prerequisites for taking out a home loan if you have foreign income. Otherwise, you will not be able to obtain a home loan from any credit institution.
Foreign workers generally require continuous employment for more than 3 months. A bank can apply for 6, but preferably 9 to 12 months , or 24 months in total, from multiple locations.
In most cases, financial institutions expect a contract of indefinite duration. Lending institutions prefer a contract of indefinite duration because it gives them greater security. In the case of a fixed-term employment contract, it improves the position of the borrower if the workplace has previously extended the employee’s employment contract. Of course, the probationary period and the period of notice are disqualifications for taking out a home loan. Hungarian banks already have employer forms in English and German that do not need to be translated separately.
Bank account statement
Usually, credit institutions ask for a 3-6 month bank statement, which shows the income they have received. This can be a foreign bank account, depending on what the creditor bank accepts. There are some financial institutions that accept a statement downloaded from netbank, while others insist on a statement printed in the bank branch with a stamp and two signatures. The domestic bank expects some of the foreign income to go to the bank account it maintains. There are banks that may require proof that a loan applicant is not listed in the foreign bad debt records system.
The purchase of a property requires the amount of money required by the bank, ie own funds. Credit institutions generally disburse a maximum of 80% of the value of the property, ie a minimum of 20% own funds is required.
Income, income certificate
Eligible income is that which is certified by the employer and credited to a bank account. Generally, those working abroad have a higher income than those working in Hungary. The JTM (Income Proportional Rate Indicator) shows the maximum portion of a debtor’s income that a loan installer can make. The installment payment may not be higher than 25% of the monthly net salary, the limit is below 400 thousand dollars, and in the case of income above 30%. And for mortgages with a fixed repayment period of five to ten years, the limits are 35% and 40%, respectively. The 50 and 60% limits apply only to fixed mortgage loans for a minimum period of ten years or until the end of the term. The creditor bank may apply for a certificate of income issued by a foreign tax authority.
In 99% of the cases, you will not receive your foreign income in HUF but you will probably repay your Hungarian home loan in dollars from a Hungarian bank account. Thus, it is very important at what exchange rate and how you will deal with exchange rate differences and costs. It does not matter what the income in euros, pounds or even dollars is converted into dollar, and under what conditions. It’s a good idea to choose the right account package for this.