A variety of tools for calculating a mortgage loan are available online. However, these tools give a rough estimate and offer no guarantees. For proper insight, it is better to consult a bank directly or an agent: your financial adviser.
Advantages of a financial adviser
A financial adviser will prepare a more comprehensive analysis of your lending capacity. The adviser then uses this to shop at not one but several financing institutions for the best conditions for the buyer's situation. Ultimately, you decide which party you will engage with, and your advisor will request a quote.
The bank then takes over from the advisor and will check again if you qualify for a mortgage loan. If you do, you will receive an interest-rate offer. If you agree to it, the terms of the agreement are established and validated. Afterward, the bank carries out additional checks, following which you can expect a binding mortgage offer. The whole process takes around 5-8 weeks. This is why it is essential to involve a financial advisor in your buying process at an early stage.
The financial advisor will advise you on mortgage types and terms. Another big topic is whether to fix the interest rate and, if so, for how long. Next, the advisor can already give a reasonable estimate of the monthly charges, complete with a proper repayment plan. Finally, the advisor provides insight into different scenarios if, for example, you choose a different term.
Another task a financial adviser can assist with is creating an overview of the many documents that need to be provided to apply for a mortgage. These include many conditional aspects that depend on the applicant's situation. For example, are you on payroll, self-employed, or have your own business with staff? Credit card or no credit card? Outstanding debts are registered and queried by the bank, even the loan of a phone subscription or your student debt. All aspects affect your loan capacity.
If you make an offer on the house, you can increase your chances of winning by limiting your subject to financing or even omitting it altogether. This way, sellers don't have to wait and know immediately that your loan won't become a hurdle. This is good for the goodwill factor. If you need subject to financing, as most people do, then you will have no definitive idea whether the loan will go through until after 5-8 weeks, and not all sellers like to wait.
You want to offer certainty to the sellers to increase your chances, but often you cannot provide that certainty, and you have to wait for the bank's decision along with the sellers.
You can discuss solutions with your financial adviser or buying agent. For example, you can mention that you do not have to finance the entire purchase amount of the house with a mortgage. This will give the seller more confidence. After all, the loan amount is lower, making it more plausible you get the finance in order.
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