20 lutego 2022

Top 5 Mortgage Secrets

Top 5 Mortgage Secrets

 

Are you going to apply for your first mortgage? Or maybe you took out such a loan a few years ago? Currently, credit procedures look completely different and very often contradict what would seem "logical". Find out about the top 5 secrets of mortgage loans and don't be surprised.

 

1. The amount of income does not matter ...

 

… If you are getting it from the wrong source. Do you earn a lot and are you convinced that you will get a mortgage without any problems? Unfortunately, high income does not guarantee that your application will be automatically accepted. For a bank, the source of income (earning title) is the most important. If the funds are incorrectly documented, they have virtually no significance for the bank (regardless of the amount!). Such income can be, for example, work in the shadow economy, "illegal", but also completely legal.

 

Which type of income do banking institutions prefer? First of all, remuneration under an employment contract, preferably for an indefinite period. The employment contract must have been in force for a minimum of three months. If the contract is for a specified period, then it must be in force for a minimum of six months from the date of submitting the application.

 

Which income will still be taken into account? Banks also accept income from business activities as well as mandate contracts and contracts for specific work. If you live only on civil law contracts, you must take into account that the bank will require such a contract to last a minimum of 12 months. There are many more conditions in this type of income. Banks look at their regularity and the industry in which we work.

 

Obtaining a loan for this type of source is more difficult but possible. However, one must be careful and prepare appropriate documents that will provide the bank analyst with the information he requires, and at the same time will not raise unnecessary doubts. The rule is that we provide the bank only with the required documents (only for the required period) and nothing else. Excess can only be harmful, and it certainly will not help.

 

2. The bank will check you more closely than you think

 

Before issuing a decision on granting you a mortgage, the bank will conduct a thorough analysis of your creditworthiness and credit history. As part of the creditworthiness analysis, the bank's financial analysts will check your average monthly income and expenses.

 

The bank will also check if you have any loans, credit cards, debits on your account, etc. All information about debts incurred by Polish consumers is disclosed by most financial institutions at the Credit Information Bureau (BIK). Each bank in Poland has access not only to the loan database at BIK, but also to the National Debt Register (KRD) or the ERIF Economic Information Bureau.

 

Did you take a payday loan because non-bank loans are not disclosed in BIK? The bank will know about it anyway! For several years, loan companies have been publishing information about loans in BIK. What was once one of the greatest advantages of this type of product is no longer available.

 

For the bank, your marital status and the number of children you have are also very important. As a rule, childless married couples have greater chances of getting a loan than singles. In turn, having children is also a factor that may make it difficult to obtain a loan because our children are a cost for the bank, and not a small one, because they reduce our creditworthiness as if we had an income lower by PLN 1,500 - PLN 2,000 (for each child)!

 

As a result, some try to "hide children from the bank" by not admitting to having them. But this is a very risky strategy, because analysts have their own ways to verify the information we provide. One of the easiest and fastest ways is to check the borrowers on social media, where they often post photos of their family. Some are outraged at it, others do not believe it, but the practice is that we have already had more than one loan application rejected for this reason. Of course, no bank will officially disclose that the reason for the rejection of the application was a "photo on Facebook".

 

In addition, remember that your co-borrower (e.g. partner or partner) will also be verified, and even a person who does not take out a loan but will be a co-owner of the property being purchased. Their bank will also check and ask for proof of their income.

 

3. Interest is not the most important cost of a mortgage!

 

A mortgage is a long-term obligation that you will have to pay off for up to 30 years. Banks' offers vary greatly, so it pays to spend a bit more time finding the most attractive and relatively cheap mortgage. But what does "cheap" mean?

 

If so far, when comparing the offers of individual banks, you primarily paid attention to the amount of interest, it was a big mistake. Interest is not the most important cost at all. Many banks use the practice of significantly reducing interest, as long as they use various additional products generating huge costs. People really overpay a lot on unnecessary commissions, fees or life insurance or unemployment insurance.

 

Interestingly, if you read the general terms and conditions of these insurances well, you can rarely use them in practice! At the moment, only 3 banks on the market have mortgage insurance products that can be recommended to the client with a clear conscience. The others should be treated simply as an "additional cost" and you need to carefully calculate whether it is profitable to incur it, or maybe it is better to take a "normal" loan, even with a slightly higher interest rate.

 

4. Banks are not governed by logic, but ...

 

… Rigid procedures. Granting a mortgage loan is a big risk for the bank. In 20 or 30 years, your financial situation can change a lot. Banks are well aware of this, which is why all clients are thoroughly checked in accordance with strictly defined procedures.

 

The bank is neither your enemy nor your friend. Banking workers are simply required to comply with all top-down procedures. Of course, there are banks that are less and slightly more customer-friendly, but you cannot count on the fact that a bank employee will bend the applicable rules especially for you, so that you can get a mortgage without meeting the conditions.

 

Understand, the bank employee is not responsible for whether you pay off the loan or not, but if he violates the procedure even a little, he will definitely be held responsible for it.

 

So can't the procedures be bent? Can't an exception be made for a good customer? Well you can. A good credit advisor has cleared all the paths and knows how to do it. However, even a deviation from the procedure must be dealt with with the bank through ... an appropriate procedure. But don't worry - you don't need to know anything about it - all you need to do is have a good credit advisor who knows it.

 

5. You don't have to rely on one bank!

 

Comparing offers is the key to success. You should not rely on an offer prepared by one bank. The more suggestions you compare, the better. The difference in the monthly installment in the amount of PLN 15 may seem small, but if we multiply it over the entire loan period, you will collect a really large sum (after 30 years it is over PLN 5,000). Comparing several offers may take a little more time, but you will feel the benefits of a smart decision throughout the repayment period.

 

Also remember that putting everything on one card can end up very badly. We apply for a loan after paying the deposit and we usually have 2 months to receive it. If something is extended or it becomes jammed (which often happens especially in banks that have a great promotion), you risk losing your deposit - usually 10% of the property value. Yes, it is as much as PLN 30,000 when buying a property for PLN 300,000. That's why you can't put everything on one card. You must have more than one ace up your sleeve.

 

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.

 

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.