Mortgage – what is it?
A mortgage loan is a long-term financial commitment contracted in a bank. Its security is a mortgage established on the right of perpetual usufruct or ownership right. Mortgage is a targeted product, the purpose of the funds is clearly defined as opposed to loans or cash loans. A mortgage loan can be issued for an apartment, building a house, purchasing a building plot, repairing real estate, etc.
Although many people use the term “mortgage” and “home loan” interchangeably, these products are different from each other. Commitment mortgage can be used for more things, mortgage while you can utilize only on the purchase of an apartment, house, garage or buy a council flat.
The minimum loan term is 5 years, maximum 35 years. The time for which the bank will spread mortgage installments depends on the financial situation of the potential borrower.
Mortgage interest rate is one of the factors to which you must pay attention when choosing this product. It depends on changes in interest rates and margins. Usually it is 3-4%. However, there are other mortgage costs. When comparing offers, it is worth paying attention to the RRSO indicator, ie the Real Annual Interest Rate. It shows how real commitment costs will be, most often the APR exceeds the interest rate.
What is the cost of a mortgage?
Several factors affect the liability cost. These include: bank commission, preparation fees, credit holidays, grace period, loan repayment period or insurance. To find out how much you will need to pay off your capital, you can use the practical tools on the Internet, which are mortgage comparison websites. All you need to do is give them the amount of the loan and the loan period. After a while, the interested party learns what kind of banks have interest rates, APY, commission and the final amount to be repaid. If you want to find out what will be the monthly commitment on such a debt, a mortgage calculator will help you determine the expected installment. Such tools allow you to simulate a mortgage and compare offers.
Mortgage costs also include the establishment of a mortgage, notarial fees, establishment of a land and mortgage register (for real properties that do not have it), costs of possible early repayment of the liability.
Mortgage – what documents?
In order to apply for this financial product, several conditions must be met. Begin with the submission of documents necessary for a mortgage loan, and these are quite a lot. Of course, you must present your ID card and a second document with a photo that will confirm the identity of the person concerned. You will also need certificates of employment and income, a bank account statement, a ZUS certificate on the amount of the base from which contributions are paid. If, on the other hand, a marriage is trying to obtain a loan, then a shortened copy of the marriage should be enclosed with the property separation agreement.
How much do you need to earn to get a mortgage?
Banks are thoroughly analyzing our credit history. They check the information included in the BIK to check whether the potential borrower has had problems with the repayment of previous liabilities in the past. Financial institutions need to be sure that the client will be able to regulate monthly payments. Particularly, financial credibility is especially important, and it is mainly earnings that influence it. It is difficult to say how much you need to earn to get a mortgage. A lot depends on the amount of the loan and the length of the loan period. The form of work is also important. Favorable banks look at clients who have an employment contract for an indefinite period.
How to get a mortgage?
In the case of a mortgage, creditworthiness is important. It is a long-term commitment, so banks must secure for many years of loan repayment. The better the financial situation, the greater the chances of the commitment. Positive history in BIK, lack of debts, high earnings, credit for two, high personal contribution increase the chances of getting a mortgage.
In which bank mortgage?
Many people wonder which bank the mortgage will be the most profitable. To find out, it is worth using the rankings or comparisons of mortgages. And how to calculate the mortgage installment? You can do it yourself, but it is time-consuming. Quickly use the mortgage installment calculator, which will make all calculations alone and will take into account the parameters of various financial institutions. And in which bank is it worth taking a mortgage?
Mortgage loan without own contribution – is it possible?
The own contribution is strictly required in mortgages. The higher, the smaller the amount to be repaid, but also the greater the chance of granting this product. How much of your own contribution should you pay with your mortgage loan? Usually it is 10-20% of the value of the commitment. This is a form of security for the bank, in addition, it positively affects the creditworthiness. A high own contribution also favors higher interest rates as they are charged on a lower amount. This does not mean, however, that there are no mortgages without own contribution. However, such a product can be obtained in special cases. Among them, it is necessary to have security on another property, the value of which exceeds the amount of own contribution. It is also possible to borrow from the developer, which will be used for own contribution. Another way to avoid your own contribution is to acquire real estate at a lower price than its real value. Then the difference between the transaction price and the value of the real estate can be counted as own contribution.