The first step to buying a home in Norway starts with a mortgage application, but how much red tape is there for foreign residents when it comes to obtaining a loan?
One of the first things to know is that there are no rules that prevent foreigners from owning or buying property in Norway, so you are ready to begin your dream home search in that regard.
You can apply for a mortgage at most traditional banks in Norway. In addition, there is also the Norwegian State Housing Bank, Husbank, which provides grants for the construction of new houses and the renovation of properties.
Municipal start-up loans are also an option for those struggling to obtain a mortgage from a typical bank. You can read more about municipal start-up loans here. How municipal loans are made will depend on the practices of the local authority in question.
ALSO READ: Is it better to buy or rent a property in Norway?
Once you’ve found your provider, it’s time to sit down with him and discuss the mortgage itself.
If you’d like to read more about property in Norway, from a guide to buying in Oslo to whether solar panels are worth investing in, click here.
What paperwork will I need?
The documents you need will vary, but in general, you will need your financial records, such as pay stubs, as proof of your income. In addition, the bank may also request your tax records. You will also need a Norwegian identification number, such as a D number or Personummer. You will not be able to get a mortgage or buy any property without the identification number.
This could be one of the main obstacles for new foreign residents in Norway.
Another obstacle could be a lack of credit history in Norway if you have been in the country less than a year, sometimes longer. Lack of credit history, which does not carry over from the country you come from, could delay the process or prevent you from obtaining a mortgage entirely.
For those who have already lived in Norway for a while, obtaining a mortgage should be straightforward, as banks will already have an identification number and a credit history.
If you are applying for a loan with a Norwegian partner, then it may be possible to get a home loan without much credit history in Norway, but this will come at the cost of higher rates.
How much can i borrow
Generally speaking, you will be able to borrow either three times your annual income or up to 85 percent of the property’s price. Supplemental loans are an option for those who cannot deposit 15 percent up front.
Additionally, first-time buyers can apply for a special mortgage in which they can borrow 100 percent of the purchase price, and the interest rate will be fixed for the life of the mortgage.
The repayment period in Norway is usually between 20 and 30 years. You can check and compare mortgage providers here.
It’s worth keeping in mind that mortgage rates are on the rise in Norway after they were set to zero during the pandemic. This means that you should expect interest rates to increase and repayments to become more expensive in the first few years after you take out your mortgage. So if you can, you should try to budget for rising reimbursement costs.
READ MORE: Norwegian Lenders Raise Interest Rates After Central Bank Hike
Another thing worth noting is that you should receive the all-important official mortgage approval document once your application has been approved. You will need it to buy a house in Norway.
Vocab
- Impressions Vseeing
- Housing Mortgage
- New construction New construction
- Property prices- Real estate prices
- Bid round Bidding process
- Tax return – tax assessment
- Housing account– house bill
- Average price – average price
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