Before sending an application for a mortgage, it is worth learning the conditions set by all banks operating in the country. Thanks to this, the borrower can prepare well enough to get a loan for an apartment without any obstacles.
A mortgage is one of the most frequently incurred credit obligations. Over 4 million people have already received such financial support from commercial banks operating in the country. Forecasts indicate that another large group will join these borrowers in the near future. The demand for such a commitment does not decrease, on the contrary. The inhabitants of our country can finally afford regular repayment of their debts, their creditworthiness is also increasing, which is why such a commitment is received by the majority of applicants. Learn more about the mortgage. Check how to increase your chances of establishing cooperation with the institution.
What is a mortgage?
A mortgage is an intentional commitment that relates to the purchase of real estate. A mortgage is taken for the purchase of real estate on the primary or secondary market. These include an apartment, a house, an outbuilding, a garage or a commercial premises – in fact, all properties that have their own mortgage book and can become collateral against any insolvency of the borrower.
Interestingly, the mortgage is one of the largest liabilities that banks incur. Its average value is USD 340,000 and the contract with the bank lasts on average 13 years. No wonder that institutions place tough conditions for potential clients and numerous restrictions. Creditworthiness is also meticulously calculated and credit risk is minimized.
Conditions for obtaining a mortgage
Before sending a mortgage application, it is worth getting to know the general conditions set by all commercial banks operating in the country. Thanks to this, the borrower can prepare well enough to get a loan for an apartment without any obstacles.
It should be known that banks granting mortgage loans must take into account not only the provisions of law or their own credit policy, but also the standards set. According to it, creditworthiness includes not only income, expenses related to other liabilities or credit history, but also own contribution. Currently, borrowers applying for a real estate loan must make an own contribution with a minimum value of at least 20% of the value of the liability. The own contribution can of course be reduced, but it is always associated with obtaining slightly worse credit conditions and additional costs.
Most often, banks increase the chance of obtaining financial support for the purchase of real estate by imposing the need to purchase additional products. The own contribution may be reduced if the borrower sets up a paid account or purchases additional insurance. As part of the own contribution, banks accept not only cash. The own contribution may also be the costs that the borrower has already incurred in connection with the commenced construction of the property or purchase of land for the construction of the house.
Who has a chance for a mortgage?
All persons who are of legal age, are citizens and have a specific property that they want to purchase as part of the loan obligation, have a chance to get a mortgage. In addition, they must have adequate creditworthiness. The bank must be sure that such a large liability will be repaid. That is why, as an additional security, an appropriate entry is created in the mortgage of the purchased property, which is also additionally insured with the assignment to the institution.