What is an income and expenditure form and why do I need it?

Based on your household's income and expenses, banks are able to calculate the mortgage you can afford. Depending on how you want to use the property, banks also work with different flat rates.

On the income and expenditure form of your household, your regular income and expenses are listed in a table. If you want to apply for a loan at the bank, the bank wants to know for sure that you'll be able to afford the monthly rates. Therefore, your expenses should never exceed your income. Included in your expenses are consumer loans that you also may be paying off. As a rule of thumb, the more loans you take out at once and the more you spend your income on other things, the higher the risk for the bank that you won't be able to repay them. That affects the offers that you will receive from a bank.

If you wish to purchase a property for personal use, the calculation of a mortgage rate is pretty easy (35 percent max of your monthly household income). When it comes to investment properties, however, the situation looks a little different. Every bank uses other flat rates and risk deductions to calculate the size of a mortgage and their personal risk. 

Urbyo has a template for your income and expenditure form that you can download [Coming soon!]. You can find more information regarding this topic and property investment in general on our page here [Coming soon!].