A2 coding BKR: what does this mean and what can you do about it?

What is a BKR A2 coding? And what do you do about it?

A BKR A2 coding is the toughest negative BKR registration you can get. This registration severely limits your financial options, especially if you want to take out a mortgage. But there is hope. We explain to you exactly what an A2 coding BKR means, what the consequences are, and most importantly, how to get rid of it.

Your financial situation may have deteriorated for a variety of reasons. Perhaps due to divorce, illness, job loss or the economic situation. But now that you are back on track financially, you want to get on with your life. Buy a house, finance a car or take out a loan. However, an A2 coding BKR is holding you back.

In this comprehensive guide, you'll discover all the ways you can regain your financial freedom. We take you step-by-step through exactly what an A2 coding is, how long this registration will remain, how it will affect your mortgage options and how you can possibly get it removed.

What exactly is an A2 coding BKR?

An A2 coding BKR consists of two parts: the letter "A" and the number "2. Together they make up the heaviest negative BKR registration a consumer can receive. But what exactly do these codes mean?

The "A" stands for arrears notification. This means that you are in arrears on a loan. A arrears notification does not happen overnight. Before a lender proceeds to place an A code, you will be notified. You are then given the opportunity to pay off the arrears within a certain period of time or to make an arrangement.

The number "2" is a particularity code indicating that the loan has been made fully due and payable by the lender. This means that the lender has completely lost confidence in you as a consumer and is demanding that you repay the remaining balance of the loan in one lump sum. This step almost always involves the use of a bailiff or collection agency.

So an A2 coding BKR does not just happen. Before a lender proceeds to make a loan payable, there must be at least two to four months in arrears, depending on the type of loan. In addition, several reminder letters must have been sent without response or payment, and an attempt must have been made to make a payment arrangement that you refused or failed to comply with.

"Many people think an A2 code is only a problem for BKR registration, but the consequences are much bigger. In the event of a foreclosure, bailiffs can seize assets or block your bank account. It is therefore essential to take action quickly."

Deepak - Legal Specialist

The crucial distinction with an A2 coding BKR is whether or not it has an end date. If it does not have an end date, it means that the debt has not yet been fully repaid. With an A2 coding without an end date, it is virtually impossible to get a mortgage or other financing. Lenders always require outstanding debts to be paid off in full first before a new financing will be considered.

Does your A2 coding do have an end date? Then the debt is completely paid off, including all additional costs such as interest, collection costs and bailiff fees. Yet the coding remains visible for five more years as a warning to other lenders. This makes taking out new financing very difficult, but not necessarily impossible.

Getting a mortgage with an A2 coding BKR: is it possible?

A mortgage closing with an A2 coding BKR is extremely difficult, but under specific conditions not completely impossible. However, you have to consider very strict requirements and a low success rate.

First of all, it is essential that your A2 coding has an end date. This means that the debt has been paid off in full. Without an end date, meaning the debt is still outstanding, a mortgage is absolutely out of the question with all mortgage lenders without exception.

Then you must meet a number of strict conditions:

• There must be a convincing explanation of the circumstances that led to the claim. Only external causes such as serious illness, long-term unemployment, divorce or bankruptcy of one's own business are usually considered acceptable. Deliberate default or structural financial misconduct almost always leads to rejection.
• Your current financial situation must be very stable, preferably for at least two to three years after paying off the A2 debt. Permanent indefinite employment is almost always a requirement.
• No new debts or arrears must have arisen since the repayment of the A2 debt.
• You must have substantial equity, often ranging from 20% to 40% of the home value. This means that only people with substantial equity qualify at all.

If you meet all these conditions, there are some specialized mortgage lenders who will be willing to consider your application. These are often non-bank lenders supervised by De Nederlandsche Bank. You do have to expect interest rates that are 1.5% to 3% above market rates, which over a 30-year mortgage can mean tens of thousands of euros in additional costs.

Even when all conditions are met, there is no guarantee of approval. The success rate for mortgage applications with an A2 coding is estimated by specialized advisors to be less than 10%, even with all conditions met.

Because of this low success rate, many people choose to first try to have their A2 coding removed through legal means before applying for a mortgage. This is often more effective than trying to get a mortgage with an existing A2 coding.