CreditforForeigners.pl - mortgage in poland for foreigners » Before you apply for a mortgage : what should you remember?

Although the first stage of applying for a mortgage formally starts the loan application, in fact the process is longer and requires, first and foremost, a good thought not only of where to take a mortgage-backed loan, but also of defining expectations for the property itself. After all, the cost of our loan will largely depend on its value. A good choice of an apartment or a house is therefore essential. So let's approach this issue strategically and implement the plan point by point:

Property Search

For many of us, a house or flat bought with a mortgage is the final place to live. Therefore, it is worth choosing wisely, taking into account changes in the family or professional situation. Over time, we may need more space or travel to a distant city. Although it is possible to sell an apartment with a mortgage, it will not always be beneficial, so think carefully about your purchasing decisions.

It is also worth considering whether to involve a real estate agent in the process of looking for a place. Such a person has a network of contacts allowing for faster reaching the other party to the transaction. The use of such assistance is payable, but acting independently also generates costs. Especially when we are looking for a property located far from the current place of residence.

Thinking about the future

A mortgage is a commitment for many years. Most of us choose a repayment period of about 30 years, because such a period reduces the monthly installment, and this in turn has a positive effect on our ability. During this time, a lot may change: on the one hand, our financial possibilities may look different, on the other hand, the decision of the Monetary Policy Council may affect the level of interest rates.

Bearing in mind that interest rates are at historically low levels and we are increasingly troubled by rising prices of goods and services, the likelihood of their increase in the future is quite realistic. It is therefore worth calculating how the actual annual interest rate APR will change and the monthly loan installment with the change of the WIBOR rate. You have to be ready for any scenario and approach your commitment responsibly.

For this purpose, you can use a mortgage calculator. Additional insurance may also be a factor of comfort. Although they affect the cost of the obligation, they give a sense of security in the event of job loss or chronic disease that prevents timely repayment of the liability.

Defining the needs

After finding the perfect property, it will be necessary to determine what the total loan amount will be necessary to carry out the transaction - not only related to a specific loan offer, but also to other costs that accompany the purchase of a house or apartment, i.e. notary's services, court fees or broker commission .

Of course, the higher the value of the house or flat, the more creditworthiness we will need. It will also translate into the amount of own contribution that the bank will require. Currently, the necessary minimum is 20% of the value of the real estate to be credited or 10%, provided that you take advantage of low own contribution insurance.

Own contribution

For many borrowers, the basic problem is the need to find funds to cover their own contribution. From the bank's perspective, however, it is a very important risk limiting factor, therefore it is also an absolute necessity to receive a loan. Currently, the minimum own contribution is 20% of the property value.

Sometimes, however, financial institutions require an even higher financial participation of the borrower in the purchase of real estate. On the one hand, it is a considerable difficulty, on the other, however, it sometimes allows you to get more attractive loan terms. Therefore, if you have your own contribution in excess of 20% of the property value, you should try to negotiate loan terms.

Finding the best deal

The next step will be to search for the best offer leading to the conclusion of a mortgage loan agreement with the appropriate bank. One of the determinants may be the actual annual interest rate APRC, thanks to which we will know most of the costs associated with the commitment per year. However, this is not the only element and making the right decision requires a much broader perspective.

It is worth checking the total amount to be repaid and the amount of the monthly installment, because it will directly affect the current condition of our budget. We must also remember that most mortgage loans granted in Poland are based on a variable rate. This means that the amount of the monthly installment depends on the level of interest rates of the National Bank of Poland. It is therefore good to check how the change in the interest rate can translate into the amount of the monthly installment.

The cost of the loan may also be affected by the need to use additional bank products, such as a personal account with regular inflows, a credit card or insurance. The most attractive offer will help you find the mortgage loan ranking, which allows you to compare the best offers on the market in one place and submit an application if any of them meets our expectations.

Examination of creditworthiness

Before the preliminary contract with the property owner is signed, it is worth determining your creditworthiness. Thanks to this, we will find out if we will be able to count on obtaining funds in the expected amounts. In the case of housing loans, these will usually amount to several hundred thousand zlotys. We can estimate the initial debt service capacity using the creditworthiness calculator. You must remember to use truthful data, because any inaccuracies will be listed during the verification of the application by the bank.

Submitting an application for a mortgage

The next step will be to apply for a mortgage. The bank will also ask for additional documents, including, for example, a certificate of earned income. Real estate appraisal and preparation of an appraisal report will also be commissioned. This is very important because the entry in the land and mortgage register of the credited real estate will be the basic security for the repayment of the liability.

Obtaining a preliminary credit decision

After verifying both the property and the borrower, the bank will make a preliminary decision. He will often indicate additional conditions that will be necessary to conclude a mortgage contract. These may concern, for example, the purchase of additional insurance or the provision of other documents.

Purchase of an apartment

The next step will be to sign an apartment purchase contract. This must always be in the form of a notarial deed. It will also contain a provision regarding the method of withdrawing funds. In the case of housing loans, these will go directly to the seller's account. It will also be necessary to make an own contribution in an appropriate amount.

Signing a loan agreement and disbursement of funds

In the last step, a mortgage contract is concluded that allows you to mobilize funds. The funds will also go to the seller's account within a few days. At this point, the repayment period also begins.

Entry into the land and mortgage register

You become the owner of the property immediately after visiting the notary public. It will be necessary to enter an entry in the land and mortgage register, which will be properly secured by the bank. We can do it ourselves or commission a notary to do it. Importantly, after paying off the loan, the entry from the land and mortgage register should be deleted, but first you will need to obtain the relevant documents from the bank.

Remember that if you have any doubts, I am happy to offer you advice and assistance. Let's meet, you will find that my help in choosing the best mortgage can be invaluable.

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