Mortgage – what you need to know

Mortgage and housing loans are financial products with similar characteristics in many aspects. Application procedures and creditworthiness tests are almost identical. However, remember that a mortgage is not the same as a home loan. The difference mainly concerns the purpose of financing the funds raised. Will the funds from the loan be allocated to the purchase of real estate as its collateral, or maybe we have real estate that we can give to the bank as collateral and spend the money for other purposes.

Mortgages and housing loans have been concluded for many years.

Interest cost differences for these products are small, which is why all types of commissions, hidden additional fees, insurance etc. have a great impact on the attractiveness of the loan offer. It is also important to be able to take advantage of the grace period in case of problems with repayment of installments. Another element to consider is the fee for early repayment.

When applying for a mortgage, you will always be asked to make a deposit. Banks no longer borrow money for 100 or even 110% of the value of the house. Therefore, the first step in applying for a loan must be to accumulate adequate reserves that will finance the equipment or renovate the apartment.

The standard amount of own contribution is currently 20% percent of the property value, however there are banks that will finance 90% of the property purchase. One should pay attention to the fact that the choice of such banks is definitely limited, and we must also take into account the obligatory additional insurance. It can be said that the higher the own contribution, the cheaper the loan.

Creditworthiness is mainly derived from our financial position.

Each bank uses its own method of determining the amount of debt we can handle. In addition to income, creditworthiness may be affected by, among others place of residence, age, marital status and number of children, financial situation of any co-borrowers, charges arising from other credits and loans, as well as the history of servicing the existing debt.

Banks treat income from different sources differently. Income of self-employed persons employed under a specific work contract or mandate contract may not be taken into account in full.

For fixed rate mortgages, the rate remains unchanged for the first few years of the contract. After this period, the loan changes into a loan with a variable interest rate with a pre-determined margin.

Mortgage offers

In the field of mortgage loans and advances, we cooperate with most of the leading banks and financial institutions in Poland

– The maximum loan amount up to USD 30,000,000
– Loan period from 3 to 420 months
– Interest rate from 3.0%
– Commission even 0%
– Maximum actual annual interest rate of 8.00% (for selected credit products)

An example of the total cost of a mortgage for a person employed under a permanent employment contract:
Gross loan amount: USD 172,500.00
Net loan amount: USD 37,254.21
Loan period: 360 months
Interest rate: 4.22%
Bank commission: 2%
APRC: 5.59%
Total cost of credit: USD 308 126.77
Installment: 851.00 USD

The credit decision depends on the result of the individual creditworthiness examination and the credit risk assessment made by the bank, and the above example does not constitute an offer within the meaning of the Civil Code.

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