Understanding the New Home Financing Option for Families in Budapest, Hungary

Published: December 14 2023

The CSOK Plusz is a new home financing option for families in Budapest, Hungary. Unlike its predecessor, the CSOK Plusz is not a non-refundable grant, but a subsidized loan. This article will provide an overview of the key requirements and considerations for applying for the CSOK Plusz.

Applying for the CSOK Plusz requires meeting both the legal requirements and passing the bank's credit assessment. The bank will assess the applicant's financial situation, regular monthly income, existing debts, and the value of the collateral property (if applicable). The credit assessment process is complex and varies among different banks.

Having a sufficient and verifiable income is crucial for the credit assessment. The total monthly income of the family is taken into account, as both partners will be involved in the transaction. Ideally, both partners should have verifiable income, as higher income improves the chances of approval. The minimum required income depends on the loan amount, with most banks setting the threshold higher than the minimum wage.

The bank will also consider other factors during the credit assessment, such as additional sources of income (e.g., rental income, dividends, family support), irregular income (e.g., bonuses), and the applicant's employment history. Applicants must provide employer certification (for employees) or income statements from the tax authority (for self-employed individuals). It is important to have at least three months of employment or a finalized business year for self-employed individuals.

Banks typically require the submission of bank statements covering the last three to six months to verify income deposits and assess the applicant's financial behavior. Certain activities, such as gambling, can be considered as a risk factor. The bank will also assess the applicant's payment history for any prior or existing loans.

The applicant's existing debts and payment obligations are crucial in determining the affordability of loan repayments. The bank will evaluate the debt-to-income ratio based on the applicant's total income. The debt-to-income ratio determines the percentage of the income that can be allocated towards loan repayments. Different thresholds apply based on the loan amount and the applicant's income level.

A minimum down payment of at least 20% is required for a housing loan, as banks usually finance up to 80% of the property's market value.

By considering these key factors and meeting the necessary requirements, applicants can increase their chances of a successful application for the CSOK Plusz home financing option in Budapest.

What is CSOK Plusz and how does it differ from its predecessor? CSOK Plusz is the latest element of the Family Home Creation Support (CSOK) in Hungary. Unlike its predecessor, CSOK Plusz is not a non-refundable support, but a subsidized loan.

Who is eligible to apply for CSOK Plusz? Families planning to have children and have different housing goals can apply for CSOK Plusz. Both Hungarian citizens and foreign nationals who have been living in Hungary for at least 3 months as of 1 October 2022 are eligible to apply.

What is the difference between the CSOK Plusz and the regular CSOK? CSOK Plusz is a subsidized loan, while regular CSOK is a non-refundable support. Applicants for CSOK Plusz need to meet both the requirements set by the government and successfully pass the credit assessment by the bank.

What are the income requirements for CSOK Plusz? The income requirements for CSOK Plusz include having a sufficient level of verifiable income. The total monthly income of the family is taken into account, considering that both spouses will be involved in the transaction.

What are the primary sources of income accepted by banks for the credit assessment? The primary sources of income accepted by banks for the credit assessment include employee wages and entrepreneurial income. These are acceptable at all financial institutions and can be supplemented with other types of income such as income from property rental, dividend income, and family support benefits.

What are the secondary sources of income that can be considered for the credit assessment? Secondary sources of income that can be considered for the credit assessment include income from property rental, dividend income, family support benefits (such as parental benefits), and non-regular wages (such as bonuses).

What documents are required for the credit assessment? For employees, a confirmation from the employer is required. It is important to have been working at the current job for at least 3 months and not be under probation or notice of termination. For entrepreneurs, an income certificate issued by the National Tax and Customs Administration (NAV) is required, with at least one completed business year.

What role does the banking history play in the credit assessment? Banks may require a bank account statement for the last 3-6 months to check the income deposits and assess the financial behavior of the applicants. The history of gambling or betting can be a disqualifying factor in some cases.

How much monthly installment can be availed for CSOK Plusz? The existing or previously taken loans and the repayment history are taken into account when assessing the income. Having a good repayment history can be advantageous. The existing debts are also important considering the Income-to-Payment Ratio (JTM) rule, as the bank needs to ensure that the income is not overly burdened by repayment obligations. The maximum threshold for the income-to-payment ratio is determined based on the total income of the applicants.