Creditworthiness is determined by financial strength, including the robustness of future earnings, capital and liquidity and the resilience to external factors.
Assessment of your creditworthiness and approval of individual facilities take place on the basis of an overall assessment of a household's financial circumstances and credit strength profile as well as any danger signs measured relative to Nykredit's total exposure to a household, and on the basis of standard financing. The assessment includes the following:
- Current and expected future income (age, education, job etc)
- Spending pattern and payment behaviour
- Current and expected future discretionary income
- Current and expected future debt obligations measured relative to income (debt-to-income ratio) as well as debt structure
- Household wealth and wealth development
- Danger signs, including registration in a bad debtor register, overdrafts/arrears, overdraft interest, underpaid taxes, credit cards, unsuitable debt structure, frequent borrowing etc.
Standard financing means a loan with a fixed, defined interest rate and repayments and a specified repayment period. In respect of lending for housing purposes, standard financing terms mean a 30-year bond loan with repayments carrying a loan rate at least equal to fixed Danish mortgage rates, and any financing beyond the statutory loan-to-value (LTV) limit by way of a bank loan with a maximum term of 30 years.
For the purpose of the credit assessment, Nykredit will collect the following information:
- Latest tax assessment notice from the tax authorities
- Latest annual statements from banks and other lenders
- Information from the tax authorities
- Direct debit pre-notification statement
- Pay slip(s)
- Nykredit budget
- Customer's own budget
- Account statements from other banks
- Loan prepayment notes
- Contracts of sale
- Proceeds calculations
- Leases for rented homes
- Divorce settlement agreements
- Instruments of debt between children and parents
- Statements of personal net worth, including car prices, account statements, property valuation* (presumably stored in property valuation system)
- Annual financial statements and current interim balance sheet (if applicant and/or spouse is self-employed)
- Various correspondence from customer
- Construction contract
- Specification of construction costs
Please note that the list is not exhaustive, and it may be necessary to collect further information.
Nykredit may also obtain data from Experian RKI A/S (formerly RKI Kredit Information A/S) and, if relevant, the register of defaults with the French central bank.