The business editor of “WiWo” and his colleague asked banks for a loan for a house. What they experienced during the consultation.
Anabel Schröter and Philipp Frohn have written an article in the “BusinessWeek“ posed as a couple and told bank advisors that they wanted to buy a house – but didn’t have a single cent of equity. They pretended to need 110 percent financing. “We actually thought that the advisors would send us straight home. But no such luck: the money floodgates were open to us. After researching, we were glad that our story was made up,” writes Philipp Frohn on Linkedin.
“Financing without any equity is not bad per se,” said consumer advocate Niels Nauhauser. But: “Borrowers should honestly ensure that they can afford the loan in the long term.”
If you have a high and secure income, the math probably works out. But that’s exactly where the problem lies: “We would also get loans that could blow up in our faces when we start planning a family. I, at least, would find it a challenge to shoulder a housing burden of a good 2,000 euros if the household income shrinks, at least temporarily, to just over 4,000 euros.”
Admittedly, their sample was small, and many advisors did a great job. The editors are of the opinion that consumers should be able to make financial decisions themselves and should not laugh and run into credit hell. “But I would naively expect a financial advisor to: advise – and not sell, to give clear warnings in cases like ours and to shout “No!” at the top of their voice.” The experiment was about initial discussions. Perhaps someone at the bank would have intervened in the end.
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