Getting Rejected for a Home Loan

This is a bit of a hard one for me to write as it means divulging a bit more personal information than I'm usually comfortable sharing and it's also actually quite embarrassing. But here goes... I got rejected for a home loan from almost every bank in Malta.

So, the personal stuff! This is only hard to share because we are so hardwired never to discuss money or salary that it feels kind of icky, but it's such a riduclous concept (only created so that companies can get away with paying people unfairly) and maybe I can help people with this information.

My Financial Situation

• I've lived in Malta for 10 years

• I have worked consistently

• I am in no debt (no loans, no financing on cars etc, no credit card- NOTHING)

• I have a C-level position

• I earn quite a high salary for Malta

Before I even found an apartment, I did the right thing. I went into almost every bank on the island and checked that I would be eligible. We discussed my application in depth, confirming:

1. my income (good),

2. my outgoings (€35 per month for my mobile)

3. my status in life (unmarried, no kids)

4. my job (title, company and industry)

5. and the rough amount I was looking to borrow (200 - 300k).

And every single bank confirmed I was eligible, that they’d happily loan up to €800k (one bank even insinuated I could borrow €1M if I wanted), confirmed the monthly repayments were within my affordability and told me to come back once I had signed a promise of sale.

But, because of my job title, when it came to the actual application, I was rejected by almost every bank and even had my bank account shut down during this process. You go through life thinking that you work hard, you stay out of debt, you get promoted and you aim for that C-level job, right? But in Malta, this simple job title puts you at risk of basically losing everything. Without the ability to hold a bank account, let alone get a mortgage, I started to feel like I'd have no choice but to leave the island, right at a time when I was thinking of purchasing.

Preliminary Home Loan Checks

BOV

This is the bank I have used for my banking for most of my time in Malta. They were very upset that I was unmarried and without children (what a flight risk) and that I was foreign. They gave a preliminary "yes" but based on a 30% deposit. Ha. I did not proceed with an actual application for BOV due to this.

Lombard Bank

I didn’t even go in for a quote but I did call them for information and they confirmed that ‘as a foreigner’ I could apply, but would be subject to 30% deposit.

BNF

Gave a preliminary "yes" as the requested amount was well within my affordability bracket. Based on a 10% deposit. Their interest rates were the best at the time and this is the first bank I applied with.

APS

Gave a preliminary "yes" as the requested amount was well within my affordability bracket. Based on a 10% deposit. Their interest rated were a little higher than BNF but during the initial consultation they were very keen to have me as a client and they were the second bank I applied to.

HSBC

Gave a preliminary "yes" as the requested amount was well within my affordability bracket. Based on a 10% deposit.

Formal Home Loan application

BNF - REJECTED

Once I found the apartment I wanted (rather, absolutely fell in love with) I went to my top choice (BNF) to formally apply for the loan. I didn't even bother applying at BOV due to the fact the clerk was so rude and, of course, that they'd only loan 70% of the value.

So I went to BNF, provided all the required documents, filled in the forms and started to open a bank account (always the first step) all the while absolutely certain this would be approved and we'd move forward. After a week or so I get the call. The clerk was unable to open a bank account for me (and in fact an old, unused account I’ve forgotten about had now been closed) and the bank would not be proceeding with the home loan application.

Why?

We don’t accept funds (either as loan repayments or even just sitting in a bank account) from “your industry”.

My industry is payments. Same as the bank's industry. We are licensed as a financial institution. I later found out (from someone much higher at the bank) that the real reason was my title- being a C-level.

APS- REJECTED

Next I went to APS. They'd already given me a yes, just like BNF, but due to the first rejection I was a little more wary, but also still fairly sure BNF was an anomaly. I filled in the application form, submitted all documents and started the process to open an account then a few weeks later I get an email that they will not be moving forward with my application.

Again, due to the risk associated with being a C-level executive. APS have since been in touch (6 months after the rejection) to let me know they have updated their policies and I am welcome to apply again.

HSBC - Further checks required

My final choice was HSBC. Not a bank I'd otherwise have chosen but I wasn't left with a lot of options.

HSBC were super nice from the get-go. The loan manager was shocked that I'd had issues and said HSBC would treat me as a local- I have been here 10 years after-all. I filled in the application, sent in all the required documents then attempted to open a bank account. I was told with most applications the account gets opened there and then.

During the bank account application, the clerk tells me that he will not be able to open my account today as, due to my position, the bank will require further checks. So I wait. And wait. Weeks go by. I check in regularly, with no updates. The bank doesn't ask me for any further documentation, so what further checks they are doing, I can't be sure.

Eventually, around 4 months into the process, my account gets approved (as a premium customer no less) and my sanction letter issued so I can move forward with the purchase of my dream property.

How your job title affects getting a home loan

After 4 months of stress, the odd tear and absolute confusion, I am still nowhere near the finish line. But I'll keep you posted along the way.

But I think it's good for you to be prepared that if you're looking for that C-level step, it's worth exploring alternate titles to put on your work contract. Discuss it with your company- publicly you can still be the CEO, CCO, CIO, CPO, CTO, CMO- whatever it is you actually are, but on your contract, find something the banks might find a little more palatable.

The full home loan process in Malta so far

Now, finally, I have the sanction letter in hand and can move forward with this process. I'll keep you posted as I move along!

1. Initial bank meeting (are you eligible for a loan and on what terms)

2. Find a property, make an offer, have the offer accepted

3. Sign Promise of Sale

4. Officially apply for the bank loan

5. Getting rejected

6. Setting the contract date