01 sierpnia 2021

Step by step mortgage

Step by step mortgage

 

A mortgage loan is a long-term, multi-stage and complex process. It is not possible to get it "on the spot", "on a statement" or "in 5 minutes". Prior familiarization with the individual stages will allow you to properly prepare the entire process. Arranging a mortgage takes from a minimum of 2 weeks to several months in more difficult cases. Even in the easiest version (employment contract, secondary market apartment), a mortgage is a complex operation for which you need to properly prepare in advance. This entry is to help future borrowers learn about what awaits them and what possible surprises they should be prepared for. In today's entry "Mortgage step by step" I will present:

  1.  how to prepare for a mortgage,
  2. stages of obtaining a mortgage,

  3. costs, list of documents and formalities.

 

 

1. Preparation for the preliminary analysis of the mortgage market

 

The whole process begins at home by gathering all the relevant information that will affect your loan application:

 

Prepare income data

 

The borrower must prepare the financial data carefully and in detail. Contrary to popular belief, banks do not always base their creditworthiness calculations on the average income for the last 3/6/12 months. Depending on the title of obtaining income, the differences in the amount of accepted income can reach even several dozen percent. There are (relatively often) situations where the creditworthiness calculated in bank A differs by up to PLN 100,000 or more for the same customer in bank B. You should prepare detailed income data. What is important is the division of income according to the salary base, bonuses, commissions, overtime and other allowances. Thanks to this division, your loan advisor will have a chance to correctly assess your financial situation.

 

Preparation of personal data

 

The following information should be prepared for the interview with the advisor:

 

  • number of people in the household;

  •  

    age of the oldest person;

  • own contribution, loan period, maximum level of an acceptable installment;

  • liabilities (bank, product type, loan amount, installment amount, issue date, end date).

 

Preparation of real estate data

 

The following information should be prepared for the interview with the advisor:

 

  • type of real estate purchased;

  • secondary market / primary market;

  • type of real estate ownership (ownership, cooperative ownership, tbs, )

  • possible encumbrances on the property (purchase of the property encumbered with the loan);

  • Land and Mortgage Register number (if the selection was initially made).

 

2. Research on the mortgage market

 

The borrower must collect all the required data to analyze his credit situation and may proceed to stage 2 - market research. Although, in the opinion of the client, the financial / personal / real estate situation may be clear, it should be absolutely confirmed at the source. There are several dozen banks in Poland offering mortgage loans, including the 15 largest commercial ones. The variety of offers and approaches to the same situations (personal matters, financial matters, real estate) is very large. The analysis can be made by visiting each bank individually. Alternatively, saving time, rely on the knowledge and skills of a credit advisor (I have presented the pros and cons of working with a credit advisor in the following entry). Credit expert and his duties.

 

Thanks to an early analysis, the borrower will know what obligations and what costs are associated with taking out a mortgage. I always tell my clients that taking out a loan is easy. Its correct operation is much more difficult. A mortgage loan is a much more demanding obligation than a phone account agreement or a bank account agreement. The amount, duration and possibly consequences are incomparably greater. Hence, this decision must be much better thought out.

 

 

3.Finding real estate, analysis of real estate documents

 

The future borrower, knowing all the pros and cons of a mortgage, can start looking for the target real estate. Unfortunately, more traps await you here, which you have to be careful about. Before signing the loan agreement, you should check the real estate documents. First of all, it is necessary to check whether the real estate is actually owned by the persons who present themselves as owners (section II of the Land and Mortgage Register), whether the real estate is mortgaged (section IV of the land and mortgage register, deed of real estate ownership), whether the real estate is not encumbered with a claim (section III land and mortgage register, real estate title deed), whether the developer is bankrupt or has no financial problems (economic databases, Internet). The amount of information to be checked depends on the nature of the property. All interesting information can be obtained from the documents that will also be required to submit a loan application.

 

 

4. Signing a preliminary contract and completing documents

 

After excluding all negative factors related to the real estate, you can proceed to sign a preliminary contract. In most cases, the nature of the contract is a matter to be agreed between the seller and buyer. You can choose between a "civil" contract or a notary contract. In most cases, real estate from the primary market being built by developers requires the rigor of a notary agreement in the form specified in the Act (Development Act). This contract was commonly known as a development contract. As I mentioned, the "civil" contract depends on the parties to the transaction. Nevertheless, a good contract must contain a number of information that will define the terms of the transaction.

 

The borrower must then complete a list of the necessary documents. The list of documents that will be required for specific solutions depends on the selected banks. However, most of the documents on the required bank lists are duplicated and represent the minimum required for all banks.

 

5. Submission of loan applications with documentation

 

After completing all previous formalities, a visit to selected banks or a credit advisor takes place. The loan application binds all the information contained in the documentation. A loan advisor analyzes the documentation, fills in a loan application, completes it and sends it to the bank's head office or branch (As a customer, you have the right and even an obligation to ask for confirmation of the application). You can consider this moment as the beginning of the whole process.

 

6 .Credit application analysis

 

The analysis usually takes up to 4 weeks. The waiting time depends on the bank and its current situation. The most common dependency is - the better the offer, the longer the waiting time for a decision, the worse the offer, the faster the time it takes to obtain a decision. Many customers do not understand this relationship. Some people get nervous because they have often not been informed correctly and objectively about the process. Calmness and prudence are highly recommended. After all, what is one or two weeks of waiting for a good deal more in the face of 25-30 years of worse price conditions?

Credit analysis is most often divided into 4 stages:

 

  • preliminary analysis;

  •  

    financial and personal analysis;

  • legal analysis;

  • real estate analysis.

 

Initial analysis

 

It functions in almost all banks and, as the name suggests, it is a prelude. At the same time, its scope can be very different. In one bank, a preliminary decision means that a number of information is checked personally by an analyst, in another it is a system decision after entering some data into the calculator. It is by no means decisive as to whether a loan will be granted. This is only the first step in screening out the most misplaced conclusions.


Legal analysis

 

Income and parameters of the borrower in terms of age, marital status, credit history, etc.

 

Financial and personal analysis

 

It refers to checking the acceptability in terms of the applicable laws and regulations of the bank in question.

 

Real estate / technical analysis

 

pertains to real estate. Its purpose is to determine the value, technical condition and the possibility of recognizing this property as collateral that meets the bank's requirements.

 

7. Obtaining a credit decision

 

The credit decision completes the credit analysis process. First, it determines whether the bank is willing to grant the loan. If so, such a decision specifies all the important conditions for granting the loan. It can also be a conditional decision: in such a situation, the bank makes the issuance of the final decision dependent on the fulfillment of additional conditions, e.g. the presentation of additional documents, the delivery of certificates confirming the repayment of liabilities, for which the client is unable to do so at the moment. Each decision has a specific deadline for meeting the conditions and signing the loan agreement. Most often it is 1-3 months.

 

8. Signing a loan agreement

 

After all the conditions are met, a loan agreement is generated. Always, always (!), The borrower should read the contract before signing it. I'm talking about getting acquainted not quickly, reading the contract on your knee 5 minutes before signing, but about a real analysis. At first glance, the contracts seem very complicated, but in fact they are not. The borrower has the right to obtain clarification of any doubts and questions from the adviser. If your advisor cannot or does not want to do it, and you do not feel up to yourself to explore the topic on your own, I invite you to use my services. I offer a loan agreement analysis service.

 

9.Loan payment

 

Happy end;) Payment of the loan takes place after meeting all the conditions contained in the loan agreement. Focus and try to organize everything as precisely as possible. Banks usually operate on a binary basis. The condition is either met or not. There is no room for gradation as to whether something is more or less important. Also pay attention to the contract validity period in which you must meet. It is also worth knowing that the bank needs up to 10 days to disburse the loan. Delivering documents at the last minute is not a good idea.

 

 

10. Post loan obligations

 

Launching the loan is not the end of step by step credit. Depending on the transaction and bank you may have to meet certain conditions. The most common requirements are the annual provision of a real estate insurance policy, notification of making a mortgage entry to your bank to leave the bridging insurance, real estate purchase agreement if you bought a house or flat on the primary market, and others. There should be a section on the borrower's obligations in your loan agreement.

 

 

Summary

 

All in all, getting a mortgage is a time-consuming job. As we take a step-by-step look at the process of obtaining a mortgage, we will see that it has many different steps. It is a multi-threaded process that can be overwhelming for a layperson. If we add to this the fact that the transactions for which a loan is required are of very high amounts, obtaining a loan can be very stressful. In order to go through this whole process correctly and successfully obtain a loan, it is best to seek the services of a professional. Check with your closest company - maybe someone of your friends or family used the services of a credit adviser proven on the battlefield.

 

Feel free to comment. Is the topic of credit analysis interesting for you? Let me know in the comment. Will be happy to help clarify all issues. It is important to me that every topic regarding the mortgage is absolutely explained.

 

 

 

CONTACT ME >

Mortgage broker

Michal Kaplon

os.Stefana Batorego 80

60-687 Poznan

Strona www stworzona w kreatorze WebWave.