Credit policy has been tightened in recent years. Therefore, the availability of mortgage loans is less. In addition, the Polish Financial Supervision Authority (Polish Financial Supervision Authority) introduced recommendation S. Therefore, such a loan will only be granted to people who can actually afford it.
Since 2015, there are no longer any mortgage loans on the market that are granted without own funds. Financial institutions no longer offer financing up to 110% of the property value. From 2017, we have to bring in our own funds, a minimum of 20%. Customers who bring in their own funds are much more reliable for the bank. Previously, own funds were only a bonus, increasing the chances of customers getting a loan. Moreover, such customers were offered a lower margin. Currently, if we are unable to bring in our own funds, we have virtually no chance of getting a loan. However, there are some ways to get a loan anyway.
Recommendation of S.
Recommendation S made it difficult to obtain a mortgage loan. As a result of its introduction, we have to make our own contribution. In 2014, it was enough to have own funds amounting to 5%. However, this value is gradually increasing. Although many people are unable to meet this requirement, they may receive a positive bank decision. There are several alternatives to meet the formal requirements set by the bank. Own resources are not limited only to cash, which we have to give the bank.
Another form of security
If we do not have cash, we can decide to secure another property. For example, collateral may be second flats or a plot of great value. Then the bank may issue a positive decision. However, such property does not have to be our property. It may belong to the borrower’s parents or close family.
A loan from a developer
Another way to bypass your own contribution is a loan granted by a developer. If we are interested in an apartment located on the primary market, we have a good chance of getting such a loan. Some construction companies offer this type of assistance in obtaining a loan. This increases the attractiveness of their offer, and also facilitates the sale of apartments. Therefore, if we do not have our own funds, let’s ask the developer for a possible loan.
Company cash register
If we are employed in a large workplace or the so-called We can apply for a loan from the company’s cash register. We can use the money to finance our own resources. In this way, we will not have to pay commission or additional interest to the bank. These types of loans are also not registered with credit reference offices. Thanks to this, our creditworthiness will not deteriorate. In addition, we can pay them back longer, and the monthly installment will not be too high.
The last way, when others have already failed, is a higher margin charged by the bank. According to the provisions of the S recommendation, own funds cannot come from other loans or bank credits. We must submit an appropriate declaration confirming the source of own funds. If our own contribution is lower than 20%, we may sometimes take advantage of a special offer from banks. Then we can only contribute 10%. However, we must agree to the additional financing costs. In the past, we had to take out insurance, now we have to take into account a higher margin.
Most often, when buying an apartment, we decide on a mortgage. For many people, this is the only way to own an apartment. However, we must meet the appropriate conditions set by the bank. First of all, we must demonstrate adequate creditworthiness and have our own funds, at least at the level of 20%. When analyzing creditworthiness, it is taken into account, inter alia, the amount of remuneration received, the type of contract under which we are employed, our other obligations, finances, age and number of dependents.
Sometimes we can find offers where the own contribution may be 10%.
Mortgage loan or cash loan
If we only need a small amount of money to complete the transaction, we can opt for a mortgage loan or a cash loan.
These are several advantages of this solution. First, the money can be received much faster than if we were applying for a mortgage. In addition, we can first get a loan, and then only look for an apartment. We will also not have to make our own contribution. Unfortunately, there are also downsides to this solution. First, a mortgage is a cheaper option. Second, if we are applying for a mortgage, we must be the owner or at least a co-owner of another property. It cannot be secured by a loan. The mortgage loan is secured by another real estate.
The basic difference between a mortgage loan and a cash loan or a mortgage loan is that in the first case there is special-purpose financing, and in the second, not. Therefore, if we are applying for a mortgage, we must be determined about the apartment in question, and if we are applying for other financial assistance, not.