Opening a bank account requires a little patience in Norway because banks require you to have an identification number and the process of obtaining an identification number may take months.
There are two kinds of identification numbers in Norway - a D-number and a national identity number. In addition to opening a bank account, an identification number allows you to also get a general practitioner (fastlege), rent a place to live in, pay taxes and be able to vote in elections.
Once you’ve received an identification number, you can use it, together with your passport, to open a bank account.
It is the Norwegian Tax Administration that hands out identification numbers. Which type of identification number you receive depends on the kind of residence permit you hold and how long you plan to stay in Norway.
Banks advise that you wait at least six months, if not more before you apply for a loan. You will need to have had an income for about six months and allow the bank to access your bank and tax records for this period so that it can carry out a credit check on you.
Do you have a positive cash flow? Are you paying all your bills on time? Do you have any debt? The answers to these questions will help banks determine if you will be granted a bank loan. Note that assets and savings kept in your home country don’t count towards this determination unless you transfer the savings to your bank account in Norway.
Once the bank has had an idea of what your income and savings situation is like, it will then look into the ratio of your income to the price of the property that you are looking to purchase. As a general rule, the price of a property can be around 3 to 5 times your salary. In addition, you may also need to be prepared to pay 15% of the purchase price of the house upfront. In other words, the bank may only grant you a loan of up to 85% of the purchase price of the house.
Banks may exercise flexibility on a case-to-case basis in determining the amount of loan that it will give you. As such, it is always best to speak with your bank on what your situation will afford you to avoid any disappointments.
Getting a housing loan is not a complicated process. But managing one’s expectations is key.
As one banker pointed out, there needs to be a shift in the mindset to buying a house.
“It’s not about first buying a house, then getting your internet and a phone and so on. You get your phone, you get your internet, and you get somewhere to live and pay your bills. And then, you buy a house.”