Home mortgage loans
How to take a mortgage? Considerations about taking out a mortgage are usually only started when we choose your dream property. In order to make this important financial decision, however, it is worth getting ready earlier, if only to know what expenses we will be able to afford and what funds we need to have in order to be able to implement housing plans.
Own contribution in mortgage loan companies
When applying for a mortgage we will have to have savings. They constitute the borrower’s own contribution to the investment, and banks today do not lend funds to the full price of the property. Therefore, the first step in applying for a loan must be to collect adequate reserves. At this point it is worth remembering that after taking out a mortgage, our creditworthiness will probably be severely tarnished (if not completely exhausted). Therefore, if we are planning additional expenses for equipment or renovation, we should not count on bank loans taken in the future and include them in the calculation of savings.
Banks offer better conditions for people who will spend most of their expenses out of their own pockets. A higher own contribution usually means a lower credit spread, and thus a lower cost of borrowed money.
Current mortgage loan rates today
The amount of credit depends on two factors – the value of the property and the creditworthiness of the client. The relation between the value of the collateral and the amount of the loan may not exceed 90%, although individual banks may adopt more restrictive limits.
Banks treat income differently from various sources. Income of persons running a business, employed under a contract for a specific task or contract-order may not be taken into account in full. As a borrower, we can, to a limited extent, improve our creditworthiness. Getting rid of unnecessary loans is a step that is particularly worth recommending, even if our income is sufficient to receive financing in the right amount. This move can be worthwhile when it is necessary to provide documents when applying for a mortgage. Less paper means saving time and nerves. If we close the loans before submitting the application, they will cease to be visible as active in the Credit Information Bureau, ie the database in which the bank will check us.
Refinance home mortgage loans
Knowing the maximum amount of credit we can count on, and the required outlays for own contribution and additional costs, we can set about choosing the right property. Sometimes the search will be short, but if we have very precise expectations, they can drag on for a few months or more.
If you have a flat or a house, it is worth re-checking your creditworthiness for sure, this time based on more accurate property data. Banks periodically change their approach to calculating the financial efficiency of potential borrowers. Make sure that nothing has changed and we can still count on a loan in a satisfying height. At this point, it is also worth checking the list of documents submitted together with the loan application. We will have to wait for some of them, for example certificates from banks or ZUS. If we care about the time, we can order them now, before the next step.
Online mortgage loans
After the conclusion of the preliminary contract, with the seller of the flat on the secondary market or a developer, we begin the loan application. In this process, we can use the support of an intermediary, who will compare the offers available on the market, or decide on an independent selection of lenders. The choice does not necessarily mean that we limit ourselves to only one product – we can decide on several banks in which we will later submit applications. Regardless of the path chosen, it is worth knowing the most important elements that make up the cost of borrowed money.
Some institutions make the commission dependent on the margin level, offering different loan options – with a lower margin and high commission, and vice versa. If we intend to pay off the liability earlier, eg by selling the previous apartment, the loan with a low (or zero) commission and a higher margin may turn out to be more profitable. In other cases, it is better to choose a lower margin rate.
In the case of loans for several hundred thousand, the commission may reach several thousand dollars, which places a heavy burden on the household budget. Sometimes the commission is added to the amount of debt and repaid in installments.
Insurance and house mortgage loan online
Taking out a mortgage involves the need to buy – sometimes many – insurance, which can significantly increase its cost.
At the beginning of the loan period, until you get a mortgage entry in the land and mortgage register, you have to pay the so-called bridge insurance. Usually it is collected in the form of a margin increasing the interest rate on the loan by approx. 1 pp. or in advance for several months periods. The cost depends on how quickly you manage to deal with the formalities related to the land and mortgage register. It is worth remembering that the bank is obliged to return the premium for the period when the insurance was no longer necessary.