It is said that this product connects people more than a wedding. A mortgage binds you to a bank (and a co-borrower) for a dozen or even several dozen years. Do you have to be afraid of him?
You found the perfect apartment. Small, quiet, out of the way, close to the park. Or in a skyscraper in the city center. Or you were impressed by a small house in the suburbs that you could move into later this quarter. Well, only one small question remains to be solved … where to get the money for it?
Home loans – how do you go about it?
You don’t have millions in your account – I already know that. That’s why I’m looking for a mortgage with you. And my family I was enchanted by the cottage outside the city. The whole path of property selection signed reservation agreement, viewing and planning are behind me. What’s next? The chart below will basically be permanent, regardless of the institution you choose.
- Remembering the required own contribution, estimate how much you want (you can) spend on buying a house or apartment.
- Browse banks’ offers.
- Collect necessary documents.
- Count how much it will cost you to start a loan.
- Choose a bank and offer.
- Submit an application.
- Wait for a decision.
- Meet additional conditions.
- Launch a loan!
Not all banks provide mortgage today, but you still have a fairly large selection. Ask about conditions and costs in at least a few institutions – so that you can negotiate and have a reference to the market. Be sure to check the margin, bank commission and review the products that the bank will tell you to buy as part of the cross-sell offer.
Consider whether you care about free early repayment, and under what conditions you can choose money for renovation / finishing the apartment, or maybe the most important for you will be the lowest commission.
Remember that you will need your own contribution. The loan period has ended at 100% and once even at 105% of the property value. Today the required own contribution is 20%. However, there will be banks that will lend you money if you collect (yes, yes, you collect, you will not borrow – about it will be below) min. 10% own contribution.
Housing loan – necessary documentation
The next step will be to collect the necessary documents and submit applications to selected banks. What documents will you need? Let’s divide them into several groups:
- personal documents: current ID card, sometimes a second document with a photo;
- documents regarding income, financial liabilities, and credit history. The income statement should be on bank print, so download it from the website, from an adviser or ask for it at a branch. You may also need PIT for the previous year together with UPO if you submitted your statement via the Internet and statements from the last 3 or 6 months.
- documents regarding the legal situation of the purchased property. This includes notarial deed confirming the title, excerpt from the land and mortgage register of the real estate, and in the case of real estate from the developer, you will need documents such as the developer’s National Court Register, a valid building permit, an excerpt from the land register.
Usually, the documents required for individual banks do not differ significantly, but just in case, make a list so that you don’t forget about anything. You will need the documents to submit a loan application, and only the application containing a set of properly completed documents will go to the analyst.
Housing loan – verification of the loan application
When the bank receives your application and complete documentation, the bank will verify the submitted documents. Will examine creditworthiness and estimate the risk associated with granting the loan. It will analyze your liabilities, income and check the property that is to be secured.
As part of the verification, the bank will carry out or commission a real estate appraisal to be credited. The bank needs time to carry out the necessary analyzes – from two to four, and sometimes even six weeks.
The waiting time for a credit decision depends largely on you – how quickly you will provide the documents, whether they will have errors, deficiencies or whether the property can be valued. The fact that a credit decision will be issued does not mean that you must sign a loan agreement immediately – it is valid for 30 to 90 days.
The loan agreement has several pages. Ask for its formula in advance, read it and circle all unclear, questionable or worrying points. Ask your advisor for clarification before you sign your document.
Also remember to check the relevant contract – the one you will sign – the content may contain errors regarding personal data, information about the property or the dates of the loan tranches.