CreditforForeigners.pl - mortgage in poland for foreigners

Apart from football, politics and law, the mortgage is slowly becoming an issue in which Poles have become very specialized. It is enough to obtain one loan and an "experienced" borrower wants to advise family, friends and colleagues at work. You know where and which loan is the best, cheapest and most suitable. These are, of course, slightly mocking observations on my part, but unfortunately I observe such situations from time to time. A mortgage is a rather complicated financial product. Income, personal, legal and real estate issues can vary widely. Banks offer a multitude of product offers and solutions. All this causes that more or less wise advice is circulating on the market. Therefore, I would like to warn you against blind trust, point out the lack of imagination and reflection, show that some of the advice is illegal or very dangerous to your financial stability. In today's article, you'll find out about the top 10 worst mortgage tips I've heard so far. What matters will I discuss in the article below?

1. Why is a loan with the maximum loan capacity and the longest loan period unprofitable?

2. Does credit history count in assessing the chances of a home loan?

3. Is an intermediary loan more expensive than a bank loan?

4. Is lying on the loan application a good idea?

1.Take a mortgage for as long as possible

The longer the loan period, the greater the interest that will have to be paid to the bank. Taking out a mortgage for the maximum period does not make any economic sense. The loan period should be correlated with income and expenses. Your budget after taking out a mortgage should not be too tight due to the installment. When choosing the loan period, you should also take into account the possible increase in the interest rate. It must not be forgotten that as of today the interest rate is at its lowest level in history. In time, when it is sure to increase, your installment may increase as well. Thus, the correlation of income, expenses and an appropriate buffer for an interest rate increase is to help, on the one hand, reduce interest, and, on the other hand, help in normal functioning..

2. Take out the maximum loan amount based on your creditworthiness

Taking out the maximum loan amount resulting from your creditworthiness is quite a risky decision. Maximum creditworthiness means that, in the eyes of the bank, the ability to properly settle its liabilities is just ahead of the line. When calculating capacity, banks estimate the living expenses you need to have for your basic subsistence. All it takes is a salary cut, an interest rate increase or unexpected costs, and a big problem arises. If you have to decide to take out a high loan, which is unfortunately sometimes due to the situation, try to save your savings. Ideally, they would allow you to live 6 months without earning any income. If you do not have to, try to maintain an appropriate buffer of maximum creditworthiness.

3. Overpayment of the loan is not profitable

This is theoretically possible. If you can make a profit greater than your real interest rate, it may be worthwhile to continue investing. Investments must provide more benefits than the costs of the mortgage. This approach is possible if, for example, you play on the stock exchange, run a business, rent real estate. However, it is not possible to put your funds on a deposit and get more than what you lose on the loan. It is therefore worth using the overpayment of the loan. Thanks to this, you are able to get a lot of savings on interest. However, remember to keep an appropriate financial cushion for unexpected random situations.

4. An "cheap appliance" loan to get a mortgage

The "cheap appliance" credit is a bit of a pastiche on my part. How could the purchase of the proverbial iron for PLN 300 increase the chances of getting a mortgage for PLN 500,000? It always made me laugh :) Currently, the lack of a credit history is not a problem in getting a mortgage. Apart from one bank, none of the institutions makes granting a housing loan dependent on BIK scoring. Of course, this may change in the future, as we will inevitably automate many areas of life. Credit decisions will be made by machines based on, inter alia, statistical data, including credit history scoring. However, a long time will pass before this mortgage robotization takes place. I don't see any need to artificially build your credit history today if your mortgage plans are for the next 1-2 years. If you want to learn more about mortgage a bik

5. Do not submit several applications because you will reduce the chances of a positive decision

Submitting multiple loan applications is standard behavior if you are planning a mortgage. Thanks to this treatment, we minimize the risk of not receiving a loan, increase the chances of price negotiations and buy ourselves time to make the right choice. We can never be sure that the selected bank will make a positive credit decision or that our first choice was actually correct. We cannot be sure about many issues, such as creditworthiness, property value, application analysis time, etc. Even 3-4 applications submitted in parallel do not reduce creditworthiness in any way. Yes, they can slightly lower the BIK score, but it will not affect the chances of obtaining a positive decision. I have been doing this for 10 years and it has never happened to me that any analyst would notice that a given client had too many applications.

6. An loan with mortgage broker is more expensive than a bank loan

The loan price for the customer is exactly the same, both in the case of a transaction handled by the bank and the broker. How is this possible when the bank has to pay the broker a commission? Currently, over 50% of mortgage loans in Poland are arranged by intermediaries. Skipping the middlemen would cut you off from 50% of your potential home loan clients. It is one of the sales channels for financial products. A loan arranged by an intermediary does not require payment of rent, full time, employee commission, vacation, telephone, gasoline and dozens of other smaller or larger costs that are generated by full-time employees.

7. A mortgage loan will be best in your own bank

This principle was probably created out of convenience, laziness and the unwillingness to learn new things from customers. Since mortgage loans took a massive form, none of the banks operating in Poland applied this principle. Yes, there have been promotions involving gentle reductions for own clients. However, it never took the form of negotiating "his" bank until it actually had the best price conditions. Each time you should check the offers of all banks yourself or use the help of an experienced credit expert. Banks' offers are variable. What is best for Kowalski may not necessarily be of equal value to Nowak.

8. You can take out a cash loan for your own contribution

Since the own contribution is required, banks, in accordance with the KNF recommendation, ask applicants in their loan applications about the origin of the funds contributed as their own. Taking a loan and then lying in the application means breaking the law. The own contribution may come from a donation, savings, lottery winnings, but not from any other loan.

9. Don't confess to a child for higher creditworthiness

The situation is very similar to the one described above. Not admitting to a child means concealing the truth for financial gain. This is sheer breaking the law. Due to incorrect information, the bank made a decision without taking into account all variables. This falls under the penal code, it is certainly not an innocent lie. Each person in the household must be included. Each person means about PLN 900 additional social costs per month. While in a situation where the origin of the own contribution is not so easy to prove, the child is relatively very easy. Analysts check our profiles on social media, we may be asked to show PIT (child tax credit) or the bank's attention may be paid to some expenditure on children's needs on the bank statement.

10. Make a big pay raise just before your application

Some banks are able to accept a salary increase and take into account a moment before submitting a loan application. For this you must submit an annex to the contract and confirmation of the receipt of at least one new remuneration. Everything must be reasonable and reliable. The raise must be correlated with the position and remuneration of the competition. Ideally, it should result from a promotion or be combined with an extension of the employment contract. Nobody will believe a net increase from PLN 3,000 to PLN 6,000 per month. It should also be remembered that the analyst may ask for additional documents from ZUS in order to check whether the employer increased the salary in real terms or only on paper.

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.

Top 10 Worst Mortgage Advices