General rules for granting loans for an apartment. Housing loans are granted for the purchase of an apartment on the primary or secondary market. We remind you that the purchase on the primary market is the purchase of a new apartment, and on the secondary market – the purchase of an apartment resold by its previous owner. Almost all housing loans are granted for long periods, usually for a period of 20 to 35 years1. When granting these loans, banks attach the greatest importance to meeting two conditions: demonstrating creditworthiness and having adequate collateral by the client. The basic collateral for such a loan is of course the flat. The problem is that the client of the apartment does not have it, he intends to buy it – in Chapter VI we show how this problem is solved.
Credit amount. Loans for the purchase of housing constitute the majority of mortgage loans granted by banks. They are currently being repaid by over one million people. The size of these loans varies greatly. Most customers are afraid of high interest charges and try to minimize the amount of credit as much as possible, reducing their requirements and using family support accordingly. Despite everything, the average value of mortgage loans in Poland is growing rapidly , in 2002 it amounted to 76 thousand USD, in 2005 – 110 thousand USD, and in 2009 – 203 thousand dollars .; the average loan amount was similar. In cities such as Warsaw, Krakow, Poznan, currently the largest number of borrowers take loans in the amount of about 300 thousand USD, however, there are also much smaller loans.
Formerly complicated, the credit procedures used by banks when granting loans for the purchase of an apartment have been significantly simplified, which does not mean that the conditions that a customer must meet are always easy to meet. Usually, the client must attach numerous documents to the loan application . If the client is employed full-time, he should provide the bank with a certificate from the workplace about employment under an indefinite employment contract and a statement of earnings (within the last 3 or 6 months). Persons working under a mandate contract or a specific task contract provide original contracts (mandate or specific task), a statement by the employer that they intend to maintain this type of employment relationship in the future and PITs from the last two years confirmed by the tax office. Banks grant housing loans to such persons only exceptionally.
Some potential borrowers run a business, often those who have just started such a business. In practice, the banks’ requirements for persons conducting business activity are much higher than for employees. Most often, they must provide the following documents: entry in the business register or entry in the national court register, REGON and NIP , certificate from the Social Insurance Institution (ZUS) on non-compliance with liabilities, revenue and expense ledger, PIT for the last month and last year, tax card and PIT for the last month and last year (either a tax card and PITs from recent years, and in the case of “flat-rate” payrolls – PIT-27 or PIT-28 from last year and a written statement of the amount of income for the last six months), a declaration of the spouse agreeing to taking a loan .
Banks also want to receive statements about whether the customer is a borrower or guarantor at another bank and whether he maintains accounts at other banks. Employees of the bank granting the loan encourage the transfer of the account to their bank, claiming that it will facilitate settlements related to the payment and repayment of the loan.
If we buy an apartment on the secondary market (from another user), it is required, among others preliminary agreement or certificate from the real estate brokerage firm and excerpt from the land and mortgage register . However, if the flat is being built by a cooperative or a developer, you will need: a contract for the purchase of an apartment, a certificate on the progress of the construction, its total costs and the amount of the client’s payments, and an excerpt from the land and mortgage register. Often, banks also want to receive other documents (e.g. a copy of an extract from the National Court Register of a developer or housing association). Collecting all this documentation can be difficult and time consuming . Several banks provide assistance to clients in collecting the necessary documentation without charging any fees.
The basic cost of a home loan is of course interest, the customer also pays a loan commission, and in some banks – additional fees (e.g. for submitting an application). If you repay the loan before the due date, you usually have to pay the appropriate commission , just like when you change the currency in which the loan is denominated. A client who takes out a loan for an apartment must also bear small non-bank costs. The fact that non-bank costs are small is a big plus for the borrower who, when buying a new apartment, must bear various, unpredictable expenses.